Have you been keeping an eye on National Fuel Gas Company’s (NYSE:NFG) upcoming dividend of US$0.42 per share payable on the 13 July 2018? Then you only have 2 days left before the stock starts trading ex-dividend on the 28 June 2018. Is this future income a persuasive enough catalyst for investors to think about National Fuel Gas as an investment today? Below, I’m going to look at the latest data and analyze the stock and its dividend property in further detail. Check out our latest analysis for National Fuel Gas
How I analyze 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?
- Does it consistently pay out dividends without missing a payment of significantly cutting payout?
- Has dividend per share risen in the past couple of years?
- Does earnings amply cover its dividend payments?
- Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
How well does National Fuel Gas fit our criteria?
The company currently pays out 35.90% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is covered by earnings. In the near future, analysts are predicting a higher payout ratio of 47.92%, leading to a dividend yield of 3.26%. However, EPS is forecasted to fall to $3.61 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income.
If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. In the case of NFG it has increased its DPS from $1.3 to $1.7 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. These are all positive signs of a great, reliable dividend stock.
In terms of its peers, National Fuel Gas generates a yield of 3.23%, which is high for Gas Utilities stocks but still below the market’s top dividend payers.
With these dividend metrics in mind, I definitely rank National Fuel Gas 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, you should always research extensively before deciding whether or not a stock is an appropriate investment for you. I always recommend analysing the company’s fundamentals and underlying business before making an investment decision. I’ve put together three pertinent aspects you should further research:
- Future Outlook: What are well-informed industry analysts predicting for NFG’s future growth? Take a look at our free research report of analyst consensus for NFG’s outlook.
- Valuation: What is NFG worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether NFG is currently mispriced by the market.
- 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.