Plains GP Holdings LP. (NYSE:PAGP): What You Have To Know Before Buying For The Upcoming Dividend
Have you been keeping an eye on Plains GP Holdings LP.’s (NYSE:PAGP) upcoming dividend of $0.3 per share payable on the 15 May 2018? Then you only have 3 days left before the stock starts trading ex-dividend on the 30 April 2018. Is this future income a persuasive enough catalyst for investors to think about Plains GP Holdings 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. See our latest analysis for Plains GP Holdings
How I analyze a dividend stock
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
Is it paying an annual yield above 75% of dividend payers?
Does it consistently pay out dividends without missing a payment of significantly cutting payout?
Has dividend per share amount increased over the past?
Can it afford 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?
How does Plains GP Holdings fare?
The current payout ratio for PAGP is negative, which means that it is loss-making, and paying its dividend from its retained earnings. If dividend is a key criteria in your investment consideration, then you need to make sure the dividend stock you’re eyeing out is reliable in its payments. Unfortunately, it is really too early to view Plains GP Holdings as a dividend investment. It has only been consistently paying dividends for 4 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. Compared to its peers, Plains GP Holdings has a yield of 4.86%, which is high for Oil and Gas stocks.
Next Steps:
Whilst there are few things you may like about Plains GP Holdings from a dividend stock perspective, the truth is that overall it probably is not the best choice for a dividend investor. However, if you are not strictly just a dividend investor, the stock could still offer some interesting investment opportunities. Given that this is purely a dividend analysis, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. I’ve put together three important aspects you should further examine:
Future Outlook: What are well-informed industry analysts predicting for PAGP’s future growth? Take a look at our free research report of analyst consensus for PAGP’s outlook.
Valuation: What is PAGP 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 PAGP is currently mispriced by the market.
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.
