Plains All American Pipeline LP's Dividend Analysis
An In-depth Analysis of Plains All American Pipeline LP's Dividend Performance and Sustainability
Plains All American Pipeline LP(NASDAQ:PAA) recently announced a dividend of $0.27 per share, payable on 2023-11-14, with the ex-dividend date set for 2023-10-30. 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.
Understanding Plains All American Pipeline LP's Business
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Plains All American provides transportation, storage, processing, fractionation, and marketing services for crude oil, refined products, natural gas liquids, liquefied petroleum gas, and related products. Plains' assets span the United States and Alberta, Canada, but are heavily concentrated in the Permian Basin.
Reviewing Plains All American Pipeline LP's Dividend History
Plains All American Pipeline LP has maintained a consistent dividend payment record since 1999. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Examining Plains All American Pipeline LP's Dividend Yield and Growth
As of today, Plains All American Pipeline LP currently has a 12-month trailing dividend yield of 6.72% and a 12-month forward dividend yield of 7.05%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Plains All American Pipeline LP's annual dividend growth rate was -15.50%. Extended to a five-year horizon, this rate decreased to -16.30% per year. And over the past decade, Plains All American Pipeline LP's annual dividends per share growth rate stands at -12.50%.
Based on Plains All American Pipeline LP's dividend yield and five-year growth rate, the 5-year yield on cost of Plains All American Pipeline LP stock as of today is approximately 2.76%.
Assessing Dividend Sustainability: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-06-30, Plains All American Pipeline LP's dividend payout ratio is 0.60.
Plains All American Pipeline LP's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Plains All American Pipeline LP's profitability 7 out of 10 as of 2023-06-30, suggesting good profitability prospects. The company has reported net profit in 9 years out of the past 10 years.
Looking at Growth Metrics for Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Plains All American Pipeline LP's growth rank of 7 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Plains All American Pipeline LP's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Plains All American Pipeline LP's revenue has increased by approximately 24.80% per year on average, a rate that outperforms approximately 76.5% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Plains All American Pipeline LP's earnings increased by approximately -23.40% per year on average, a rate that outperforms approximately 14.69% of global competitors.
Concluding Thoughts
Given Plains All American Pipeline LP's consistent dividend payments, strong profitability and growth metrics, the company seems well-positioned for future dividend sustainability. However, investors should also consider the company's declining dividend growth rate and the payout ratio. With these factors in mind, investors should continue to monitor Plains All American Pipeline LP's financial performance and dividend announcements closely.
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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.
