Shares of CNX Midstream Partners LP (NYSE:CNXM) will begin trading ex-dividend in 3 days. To qualify for the dividend check of $0.31 per share, investors must have owned the shares prior to 02 February 2018, which is the last day the company’s management will finalize their list of shareholders to which they will send dividend payments. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine CNX Midstream Partners’s latest financial data to analyse its dividend characteristics. See our latest analysis for CNX Midstream Partners
5 questions to ask before buying a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
- Is its annual yield among the top 25% of dividend-paying companies?
- Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
- Has it increased its dividend per share amount over the past?
- Does earnings amply cover its dividend payments?
- Will the company be able to keep paying dividend based on the future earnings growth?
How does CNX Midstream Partners fare?
The current trailing twelve-month payout ratio for the stock is 67.31%, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting a higher payout ratio of 88.70%, leading to a dividend yield of 7.75%. Moreover, EPS should increase to $1.72. The higher payout forecasted, along with higher earnings, should lead to greater dividend income for investors moving forward. If dividend is a key criteria in your investment consideration, then you need to make sure the dividend stock you’re eyeing out is reliable in its payments. The reality is that it is too early to consider CNX Midstream Partners as a dividend investment. It has only been consistently paying dividends for 3 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. In terms of its peers, CNX Midstream Partners generates a yield of 6.20%, which is high for Oil and Gas stocks.
With these dividend metrics in mind, I definitely rank CNX Midstream Partners as a strong income stock, and is worth further research for anyone who considers dividends an important part of their portfolio strategy. Given that this is purely a dividend analysis, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. I’ve put together three pertinent aspects you should further examine:
- 1. Future Outlook: What are well-informed industry analysts predicting for CNXM’s future growth? Take a look at our free research report of analyst consensus for CNXM’s outlook.
- 2. Valuation: What is CNXM 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 CNXM is currently mispriced by the market.
- 3. 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 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.