On the 14 May 2018, CVR Energy Inc (NYSE:CVI) will be paying shareholders an upcoming dividend amount of $0.5 per share. However, investors must have bought the company’s stock before 04 May 2018 in order to qualify for the payment. That means you have only 3 days left! Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into CVR Energy’s latest financial data to analyse its dividend attributes. See our latest analysis for CVR Energy
5 checks you should do on a dividend stock
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
- Is its annual yield among the top 25% of dividend-paying companies?
- Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
- Has it increased its dividend per share amount over the past?
- Is it able to pay the current rate of dividends from its earnings?
- Will the company be able to keep paying dividend based on the future earnings growth?
How well does CVR Energy fit our criteria?
CVR Energy has a trailing twelve-month payout ratio of 62.36%, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting a higher payout ratio of 90.22%, leading to a dividend yield of 5.77%.
Reliablity is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. The reality is that it is too early to consider CVR Energy as a dividend investment. It has only been consistently paying dividends for 6 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. Compared to its peers, CVR Energy produces a yield of 5.77%, which is high for Oil and Gas stocks.
If CVR Energy is in your portfolio for cash-generating reasons, there may be better alternatives out there. However, if you are not strictly just a dividend investor, the stock could still offer some interesting investment opportunities. 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 important factors you should look at:
- Historical Performance: What has CVI’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.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on CVR Energy’s board and the CEO’s back ground.
- 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.