Antero Midstream Corp's Dividend Analysis
An In-depth Examination of Antero Midstream Corp's Dividend Performance and Sustainability
Antero Midstream Corp (NYSE:AM) recently announced a dividend of $0.23 per share, payable on 2023-11-08, with the ex-dividend date set for 2023-10-24. As investors anticipate this upcoming payment, attention is also drawn to the company's dividend history, yield, and growth rates. Utilizing data from GuruFocus, we delve into Antero Midstream Corp's dividend performance and assess its sustainability.
Understanding Antero Midstream Corp's Business
This Powerful Chart Made Peter Lynch 29% A Year For 13 Years
How to calculate the intrinsic value of a stock?
Antero Midstream Corp is a midstream company that owns, operates, and develops midstream energy infrastructure services and production activity in the Appalachian Basin's Marcellus Shale and Utica Shale located in West Virginia and Ohio. The company operates in two segments; the Gathering and Processing segment includes a network of gathering pipelines and compressor stations that collect and process production from Antero Resources wells in West Virginia and Ohio. The Water Handling segment includes two independent systems that deliver water from sources including the Ohio River, local reservoirs, and several regional waterways. A majority of the company's revenue is derived from the Gathering and Processing segment.
A Look at Antero Midstream Corp's Dividend History
Since 2017, Antero Midstream Corp has maintained a consistent dividend payment record, with dividends currently distributed on a quarterly basis. The chart below shows the annual Dividends Per Share for tracking historical trends.
Examining Antero Midstream Corp's Dividend Yield and Growth
As of today, Antero Midstream Corp currently has a 12-month trailing dividend yield of 7.21% and a 12-month forward dividend yield of 7.21%. This suggests an expectation of same dividend payments over the next 12 months.
Over the past three years, Antero Midstream Corp's annual dividend growth rate was -6.00%. When extended to a five-year horizon, this rate increased to 50.00% per year. Consequently, the 5-year yield on cost of Antero Midstream Corp stock as of today is approximately 54.75%.
Dividend Sustainability: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-06-30, Antero Midstream Corp's dividend payout ratio is 1.27, which may suggest that the company's dividend may not be sustainable.
Antero Midstream Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Antero Midstream Corp's profitability 6 out of 10 as of 2023-06-30, suggesting fair profitability. The company has reported net profit in 6 years out of the past 10 years.
The Future Outlook: Growth Metrics
For the sustainability of dividends, a company must have robust growth metrics. Antero Midstream Corp's growth rank of 6 out of 10 suggests that the company has a fair growth outlook.
Revenue is the lifeblood of any company, and Antero Midstream Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Antero Midstream Corp's revenue has increased by approximately 2.40% per year on average, a rate that underperforms approximately 66.13% of global competitors.
Conclusion
In conclusion, Antero Midstream Corp's dividend payments, dividend growth rate, payout ratio, profitability, and growth metrics provide a comprehensive picture of the company's dividend performance and sustainability. While the company has a consistent dividend payment record and a fair growth outlook, its high payout ratio and average profitability rank raise concerns about the sustainability of its dividends. Therefore, investors should monitor these factors closely to make informed decisions. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
