Is Noble Midstream Partners LP (NYSE:NBLX) A Good Dividend Stock?
A sizeable part of portfolio returns can be produced by dividend stocks due to their contribution to compounding returns in the long run. Noble Midstream Partners LP (NYSE:NBLX) has returned an average dividend yield of 4.00% annually to shareholders. Let’s dig deeper into whether Noble Midstream Partners should have a place in your portfolio. View our latest analysis for Noble Midstream Partners
5 questions to ask before buying a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
Is it the top 25% annual dividend yield payer?
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 current trailing twelve-month payout ratio for the stock is 46.01%, which means that the dividend is covered by earnings. Going forward, analysts expect NBLX’s payout to remain around the same level at 49.78% of its earnings, which leads to a dividend yield of 4.94%. Furthermore, EPS should increase to $4.71. If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. The reality is that it is too early to consider Noble Midstream Partners as a dividend investment. It has only been paying out dividend for the past one year. Generally, the rule of thumb for determining whether a stock is a reliable dividend payer is that it should be consistently paying dividends for the past 10 years or more. Clearly there’s a long road ahead before we can ascertain whether NBLX one as a stable dividend player. In terms of its peers, Noble Midstream Partners generates a yield of 3.67%, which is on the low-side for Oil and Gas stocks.
Next Steps:
Taking into account the dividend metrics, Noble Midstream Partners ticks most of the boxes as a strong dividend investment, putting it in my list of top dividend payers. Given that this is purely a dividend analysis, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. Below, I’ve compiled three key factors you should further research:
1. 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.
2. 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.
3. 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.