Equitrans Midstream Corp's Dividend Analysis
Understanding the Dividend Profile of Equitrans Midstream Corp
Equitrans Midstream Corp (NYSE:ETRN) recently announced a dividend of $0.15 per share, payable on 2024-02-14, with the ex-dividend date set for 2024-02-05. 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 Equitrans Midstream Corp's dividend performance and assess its sustainability.
What Does Equitrans Midstream Corp Do?
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Equitrans Midstream Corp acquired EQM Midstream in mid-2020, consolidating the midstream family. Equitrans Midstream Corp now owns EQM assets directly versus just unit ownership. EQM Midstream provides gathering, transmission, and water services to primarily Appalachian producers in Pennsylvania, West Virginia, and Ohio.
A Glimpse at Equitrans Midstream Corp's Dividend History
Equitrans Midstream Corp has maintained a consistent dividend payment record since 2019, distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Equitrans Midstream Corp's Dividend Yield and Growth
As of today, Equitrans Midstream Corp currently has a 12-month trailing dividend yield of 5.80% and a 12-month forward dividend yield of 5.80%, indicating an expectation of stable dividend payments over the next 12 months.
Over the past three years, Equitrans Midstream Corp's annual dividend growth rate was -30.10%. Based on Equitrans Midstream Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Equitrans Midstream Corp stock as of today is approximately 5.80%.
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 2023-09-30, Equitrans Midstream Corp's dividend payout ratio is 0.85, which may suggest that the company's dividend may not be sustainable.
Equitrans Midstream Corp's profitability rank of 6 out of 10 as of 2023-09-30, suggests fair profitability. The company has reported net profit in 4 years out of the past 10 years.
Growth Metrics: The Future Outlook
Robust growth metrics are essential for the sustainability of dividends. Equitrans Midstream Corp's growth rank of 6 out of 10 suggests a fair growth outlook. However, Equitrans Midstream Corp's revenue has decreased by approximately -21.20% per year on average, a rate that underperforms approximately 90.38% of global competitors. Additionally, the company's 3-year EPS growth rate showcases a decline in earnings by approximately -44.60% per year on average, underperforming about 94.28% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 2.30% also underperforms approximately 68.92% of global competitors.
Next Steps
In conclusion, while Equitrans Midstream Corp offers a notable dividend yield, the company's negative dividend growth rate, high payout ratio, and underperforming growth metrics raise concerns about the sustainability of its dividend payments. Value investors may want to closely monitor Equitrans Midstream Corp's ability to reverse the negative trends in revenue and earnings growth, as these factors are crucial for long-term dividend stability. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener to find more sustainable dividend-paying investments.
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.
