Dividends play an important role in compounding returns in the long run and end up forming a sizeable part of investment returns. Navios Maritime Acquisition Corporation (NYSE:NNA) has returned to shareholders over the past 8 years, an average dividend yield of 8.00% annually. Let’s dig deeper into whether Navios Maritime Acquisition should have a place in your portfolio. See our latest analysis for Navios Maritime Acquisition
5 questions I ask before picking a dividend stock
If you are a dividend investor, you should always assess these five key metrics:
- Is it paying an annual yield above 75% of dividend payers?
- 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 its earnings sufficient to payout dividend at the current rate?
- Will the company be able to keep paying dividend based on the future earnings growth?
Does Navios Maritime Acquisition pass our checks?
The current payout ratio for NNA is negative, meaning that the company is not yet profitable and is paying dividend by dipping into its retained earnings. If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. The reality is that it is too early to consider Navios Maritime Acquisition as a dividend investment. It has only been consistently paying dividends for 8 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. Compared to its peers, Navios Maritime Acquisition has a yield of 10.30%, which is high for Oil and Gas stocks.
Taking all the above into account, Navios Maritime Acquisition is a complicated pick for dividend investors given that there are a couple of positive things about it as well as negative. But if you are not exclusively a dividend investor, the stock could still be an interesting investment opportunity. Given that this is purely a dividend analysis, you should always research extensively before deciding whether or not a stock is an appropriate investment for you. I always recommend analysing the company’s fundamentals and underlying business before making an investment decision. There are three essential factors you should further examine:
- Future Outlook: What are well-informed industry analysts predicting for NNA’s future growth? Take a look at our free research report of analyst consensus for NNA’s outlook.
- Valuation: What is NNA 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 NNA is currently mispriced by the market.
- 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 pass 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.