Dividends can be underrated but they form a large part of investment returns, playing an important role in compounding returns in the long run. In the past, Noble Midstream Partners LP (NYSE:NBLX) has returned an average of 4.00% per year to investors in the form of dividend payouts. Let’s dig deeper into whether Noble Midstream Partners should have a place in your portfolio. See our latest analysis for Noble Midstream Partners
5 checks you should do on a dividend stock
If you are a dividend investor, you should always assess these five key metrics:
- 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 dividend per share risen in the past couple of years?
- Is it able to pay the current rate of dividends from its earnings?
- Will it be able to continue to payout at the current rate in the future?
Does Noble Midstream Partners pass our checks?
The company currently pays out 44.75% 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 NBLX’s payout to increase to 55.36% of its earnings, which leads to a dividend yield of 5.30%. However, EPS is forecasted to fall to $4.23 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income. If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. Unfortunately, it is really too early to view Noble Midstream Partners as a dividend investment. Last year was the company’s first dividend payment, so it is certainly early days. The standard practice for reliable payers is to look for 10 or so years of track record. Relative to peers, Noble Midstream Partners generates a yield of 4.09%, which is on the low-side for Oil and Gas stocks.
With these dividend metrics in mind, I definitely rank Noble 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. There are three fundamental factors you should look at:
- Future Outlook: What are well-informed industry analysts predicting for NBLX’s future growth? Take a look at our free research report of analyst consensus for NBLX’s outlook.
- Historical Performance: What has NBLX’s returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
- 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.