Important news for shareholders and potential investors in Boardwalk Pipeline Partners LP (NYSE:BWP): The dividend payment of $0.1 per share will be distributed into shareholder on 01 March 2018, and the stock will begin trading ex-dividend at an earlier date, 21 February 2018. Is this future income a persuasive enough catalyst for investors to think about Boardwalk Pipeline Partners 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 Boardwalk Pipeline Partners
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 their annual yield among the top 25% of dividend payers?
- Does it consistently pay out dividends without missing a payment of significantly cutting payout?
- Has it increased its dividend per share amount over the past?
- Does earnings amply cover its dividend payments?
- Will the company be able to keep paying dividend based on the future earnings growth?
Does Boardwalk Pipeline Partners pass our checks?
The current trailing twelve-month payout ratio for the stock is 34.39%, meaning the dividend is sufficiently covered by earnings. Going forward, analysts expect BWP’s payout to increase to 107.33% of its earnings, which leads to a dividend yield of around 6.13%. In addition to this, EPS should increase to $1.25. The higher payout forecasted, along with higher earnings, should lead to greater dividend income for investors moving forward. However this does bring about uncertainty around the sustainability of the payout ratio. 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. Dividend payments from Boardwalk Pipeline Partners have been volatile in the past 10 years, with some years experiencing significant drops of over 25%. This means that dividend hunters should probably steer clear of the stock, at least for now until the track record improves. Relative to peers, Boardwalk Pipeline Partners generates a yield of 3.60%, which is on the low-side for Oil and Gas stocks.
Taking all the above into account, Boardwalk Pipeline Partners is a complicated pick for dividend investors given that there are a couple of positive things about it as well as negative. 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, 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 pertinent aspects you should further research:
- 1. Future Outlook: What are well-informed industry analysts predicting for BWP’s future growth? Take a look at our free research report of analyst consensus for BWP’s outlook.
- 2. Historical Performance: What has BWP’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. 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.