Have you been keeping an eye on Western Gas Equity Partners LP’s (NYSE:WGP) upcoming dividend of $0.57 per share payable on the 24 May 2018? Then you only have 3 days left before the stock starts trading ex-dividend on the 01 May 2018. Should you diversify into Western Gas Equity Partners and boost your portfolio income stream? Well, keep on reading because today, I’m going to look at the latest data and analyze the stock and its dividend property in further detail. See our latest analysis for Western Gas Equity Partners
5 questions I ask before picking a dividend stock
If you are a dividend investor, you should always assess these five key metrics:
- Is it paying an annual yield above 75% of dividend payers?
- Has it paid dividend every year without dramatically reducing payout in the past?
- Has dividend per share amount increased over the past?
- 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 Western Gas Equity Partners fit our criteria?
The company currently pays out 122.37% of its earnings as a dividend, according to its trailing twelve-month data, meaning the dividend is not sufficiently covered by its earnings. Going forward, analysts expect WGP’s payout to remain around the same level at 123.38% of its earnings, which leads to a dividend yield of 7.84%. In addition to this, EPS should increase to $1.86. 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. Unfortunately, it is really too early to view Western Gas Equity Partners as a dividend investment. It has only been consistently paying dividends for 5 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. Compared to its peers, Western Gas Equity Partners generates a yield of 6.68%, which is high for Oil and Gas stocks.
After digging a little deeper into Western Gas Equity Partners’s yield, it’s easy to see why you should be cautious investing in the company just for the dividend. But if you are not exclusively a dividend investor, the stock could still be an interesting investment opportunity. 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 fundamental factors you should look at:
- Future Outlook: What are well-informed industry analysts predicting for WGP’s future growth? Take a look at our free research report of analyst consensus for WGP’s outlook.
- Historical Performance: What has WGP’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.
- 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.