4 Days Left To Cash In On Apache Corporation (NYSE:APA) Dividend
Investors who want to cash in on Apache Corporation’s (NYSE:APA) upcoming dividend of US$0.25 per share have only 4 days left to buy the shares before its ex-dividend date, 18 January 2019, in time for dividends payable on the 22 February 2019. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into Apache’s latest financial data to analyse its dividend attributes.
See our latest analysis for Apache
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5 questions to ask before buying a dividend stock
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
Is it the top 25% annual dividend yield payer?
Does it consistently pay out dividends without missing a payment of significantly cutting payout?
Has dividend per share risen in the past couple of years?
Is is able to pay the current rate of dividends from its earnings?
Will the company be able to keep paying dividend based on the future earnings growth?
How does Apache fare?
The company currently pays out 44% of its earnings as a dividend, according to its trailing twelve-month data, meaning the dividend is sufficiently covered by earnings. Going forward, analysts expect APA’s payout to increase to 51% of its earnings. Assuming a constant share price, this equates to a dividend yield of around 3.1%. However, EPS is forecasted to fall to $1.85 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income.
If you want to dive deeper into the sustainability of a certain payout ratio, you may wish to consider the cash flow of the business. A business with strong cash flow can sustain a higher divided payout ratio than a company with weak cash flow.
If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. APA has increased its DPS from $0.60 to $1 in the past 10 years. It has also been paying out dividend consistently during this time, as you’d expect for a company increasing its dividend levels. This is an impressive feat, which makes APA a true dividend rockstar.
Compared to its peers, Apache produces a yield of 3.2%, which is on the low-side for Oil and Gas stocks.
Next Steps:
Considering the dividend attributes we analyzed above, Apache is definitely worth keeping an eye on for someone looking to build a dedicated income portfolio. Given that this is purely a dividend analysis, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. Below, I’ve compiled three pertinent factors you should further examine:
Future Outlook: What are well-informed industry analysts predicting for APA’s future growth? Take a look at our free research report of analyst consensus for APA’s outlook.
Valuation: What is APA worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether APA is currently mispriced by the market.
Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
