Plains All American Pipeline LP's Dividend Analysis
Assessing the Sustainability of Plains All American Pipeline LP's Dividend
Plains All American Pipeline LP (NASDAQ:PAA) recently announced a dividend of $0.32 per share, payable on 2024-02-14, with the ex-dividend date set for 2024-01-30. 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 delve into Plains All American Pipeline LP's dividend performance and assess its sustainability.
What Does Plains All American Pipeline LP Do?
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Plains All American provides transportation, storage, processing, fractionation, and marketing services for crude oil, natural gas liquids, and related products. Plains All American Pipeline LP's assets are spread across the United States and Alberta, Canada, with a significant presence in the Permian Basin, a key oil-producing region.
A Glimpse at Plains All American Pipeline LP's Dividend History
Plains All American Pipeline LP has upheld a steady dividend payment track record since 1999, with dividends distributed quarterly. Below is a chart illustrating the annual Dividends Per Share to track historical trends.
Breaking Down Plains All American Pipeline LP's Dividend Yield and Growth
As of today, Plains All American Pipeline LP boasts a 12-month trailing dividend yield of 6.56% and a 12-month forward dividend yield of 7.79%. This indicates an anticipated increase in dividend payments over the next year. However, the company's annual dividend growth rate has been negative over the past three, five, and ten years, with rates of -15.50%, -16.30%, and -12.50% respectively. Consequently, the 5-year yield on cost for Plains All American Pipeline LP is approximately 2.69%.
The Sustainability Question: Payout Ratio and Profitability
Evaluating the sustainability of the dividend requires a look at the company's payout ratio. Plains All American Pipeline LP's dividend payout ratio is 0.76 as of 2023-09-30, which could indicate potential concerns regarding dividend sustainability. Furthermore, Plains All American Pipeline LP's profitability rank is 7 out of 10, reflecting good profitability prospects. The company has reported net profit in 9 out of the past 10 years, underpinning the strength of its earnings.
Growth Metrics: The Future Outlook
For dividend sustainability, strong growth metrics are crucial. Plains All American Pipeline LP's growth rank is 7 out of 10, indicating a positive growth trajectory. The company's revenue per share and 3-year revenue growth rate show a robust revenue model, with an average annual increase of 24.80%. Plains All American Pipeline LP's 3-year EPS growth rate and 5-year EBITDA growth rate further demonstrate its capacity for earnings growth, which is vital for maintaining dividends over the long term.
Concluding Thoughts on Plains All American Pipeline LP's Dividends
In conclusion, while Plains All American Pipeline LP has a history of consistent dividend payments, the negative dividend growth rates over various periods raise concerns about long-term sustainability. The company's payout ratio and profitability rank offer some reassurance, but investors should consider these factors in light of the overall declining dividend growth trend. Growth metrics present a mixed picture, with strong revenue growth countered by less impressive earnings and EBITDA growth rates. Value investors should weigh these aspects carefully when evaluating Plains All American Pipeline LP as a potential income-generating investment. For further analysis and investment opportunities, GuruFocus Premium users can utilize the High Dividend Yield Screener.
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.
