Delek Logistics Partners LP's Dividend Analysis
Insights into Delek Logistics Partners LP's Upcoming Dividend Payment
Delek Logistics Partners LP (NYSE:DKL) recently announced a dividend of $1.06 per share, payable on 2024-02-12, with the ex-dividend date set for 2024-02-02. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Delek Logistics Partners LP's dividend performance and assess its sustainability.
What Does Delek Logistics Partners LP Do?
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Delek Logistics Partners LP owns and operates logistics and marketing assets for crude oil and intermediate and refined products. The company's segments include Pipelines and Transportation and Investments in Pipeline Joint Ventures, with the majority of revenue generated from the Pipelines and Transportation segment. This segment comprises pipelines, tanks, offloading facilities, trucks, and ancillary assets, which provide crude oil gathering and transportation and storage services in support of Delek Holdings' refining operations in Tyler, Texas, El Dorado, Arkansas, and Big Spring, Texas.
A Glimpse at Delek Logistics Partners LP's Dividend History
Delek Logistics Partners LP has maintained a consistent dividend payment record since 2013, with dividends currently distributed on a quarterly basis. As a dividend achiever, Delek Logistics Partners LP has increased its dividend each year since 2013, a testament to its commitment to returning value to shareholders. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Delek Logistics Partners LP's Dividend Yield and Growth
As of today, Delek Logistics Partners LP boasts a 12-month trailing dividend yield of 8.69% and a 12-month forward dividend yield of 8.89%. This indicates an expectation of increased dividend payments over the next 12 months. Over the past three years, Delek Logistics Partners LP's annual dividend growth rate was 5.40%, extending to a five-year horizon, this rate increased to 7.10% per year. Based on Delek Logistics Partners LP's dividend yield and five-year growth rate, the 5-year yield on cost of Delek Logistics Partners LP stock as of today is approximately 12.25%.
The Sustainability Question: 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. As of 2023-09-30, Delek Logistics Partners LP's dividend payout ratio is 1.21, which may suggest that the company's dividend may not be sustainable. However, Delek Logistics Partners LP's profitability rank of 8 out of 10, along with a consistent record of positive net income over the past decade, suggests good profitability prospects.
Growth Metrics: The Future Outlook
Robust growth metrics are essential for the sustainability of dividends. Delek Logistics Partners LP's growth rank of 8 out of 10 indicates a good growth trajectory relative to competitors. Despite an underperformance in revenue per share and 3-year revenue growth rate compared to global competitors, Delek Logistics Partners LP's 3-year EPS growth rate and 5-year EBITDA growth rate demonstrate its capability to grow earnings and sustain dividends.
Next Steps
Considering Delek Logistics Partners LP's dividend payments, growth rate, payout ratio, profitability, and growth metrics, value investors may find the stock an interesting option for dividend income. However, it is crucial to monitor the sustainability of the dividend closely, given the high payout ratio. With a strong track record and promising growth ranks, Delek Logistics Partners LP appears to be navigating the balance between rewarding shareholders and investing in its future. Will this trend continue, and how will it affect the company's ability to maintain its status as a dividend achiever? These are critical questions for investors to consider as they evaluate Delek Logistics Partners LP's long-term investment potential.
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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.
