Dorchester Minerals LP's Dividend Analysis
Assessing the Sustainability and Prospects of Dorchester Minerals LP's Dividend
Dorchester Minerals LP(NASDAQ:DMLP) recently announced a dividend of $0.85 per share, payable on 2023-11-09, with the ex-dividend date set for 2023-10-27. 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 delve into Dorchester Minerals LP's dividend performance and assess its sustainability.
What Does Dorchester Minerals LP Do?
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Dorchester Minerals LP operates as the owner of producing and non-producing crude oil and natural gas mineral, royalty, overriding royalty, net profits, and leasehold interests. The company generates revenues from royalties, net profits interests, lease bonus, and others. It has leasehold interests in approximately 592 counties and parishes in around 28 states.
A Glimpse at Dorchester Minerals LP's Dividend History
Dorchester Minerals LP has maintained a consistent dividend payment record since 2003. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Dorchester Minerals LP's Dividend Yield and Growth
As of today, Dorchester Minerals LP currently has a 12-month trailing dividend yield of 12.66% and a 12-month forward dividend yield of 11.64%. This suggests an expectation of decrease dividend payments over the next 12 months.
Over the past three years, Dorchester Minerals LP's annual dividend growth rate was 20.20%. Extended to a five-year horizon, this rate decreased to 14.70% per year. And over the past decade, Dorchester Minerals LP's annual dividends per share growth rate stands at 3.50%.
Based on Dorchester Minerals LP's dividend yield and five-year growth rate, the 5-year yield on cost of Dorchester Minerals LP stock as of today is approximately 25.13%.
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. 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, Dorchester Minerals LP's dividend payout ratio is 1.42. This may suggest that the company's dividend may not be sustainable.
Dorchester Minerals LP's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Dorchester Minerals LP's profitability 9 out of 10 as of 2023-06-30, suggesting good profitability prospects. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Dorchester Minerals LP's growth rank of 9 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Dorchester Minerals LP's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Dorchester Minerals LP's revenue has increased by approximately 25.30% per year on average, a rate that outperforms than approximately 77.26% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Dorchester Minerals LP's earnings increased by approximately 30.70% per year on average, a rate that outperforms than approximately 59.6% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 15.00%, which outperforms than approximately 57.98% of global competitors.
Next Steps
In conclusion, while Dorchester Minerals LP's dividend payments and growth rate are impressive, the company's high payout ratio raises concerns about the sustainability of its dividends. However, the company's strong profitability and growth metrics suggest a promising future. Investors should closely monitor these factors 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.
