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Read This Before Buying Marathon Petroleum Corporation (MPC) For Its Upcoming $0.4 Dividend

Attention dividend hunters! Marathon Petroleum Corporation (NYSE:MPC) will be distributing its dividend of $0.4 per share in 3 days time, on the 11 December 2017, and will start trading ex-dividend on the 15 November 2017. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine MPC’s latest financial data to analyse its dividend characteristics. See our latest analysis for MPC

5 checks you should do on a dividend stock

Whenever I am looking at a potential dividend stock investment, I always check these five metrics:

  • Is it the top 25% annual dividend yield payer?

  • Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?

  • Has it increased its dividend per share amount over the past?

  • Is its earnings sufficient to payout dividend at the current rate?

  • Will the company be able to keep paying dividend based on the future earnings growth?

NYSE:MPC Historical Dividend Yield Nov 12th 17
NYSE:MPC Historical Dividend Yield Nov 12th 17

Does Marathon Petroleum pass our checks?

The company currently pays out 47.91% of its earnings as a dividend, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting a payout ratio of 104.59% and dividends yield to be around 2.75%. Moreover, EPS should increase to $4.23. This means shareholders should be concerned with the company’s ability to continue paying. 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. The reality is that it is too early to consider Marathon Petroleum as a dividend investment. It has only been consistently paying dividends for 6 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. Compared to its peers, Marathon Petroleum produces a yield of 2.59%, which is on the low-side for oil, gas and consumable fuels stocks.

What this means for you:

Are you a shareholder? You may be wondering why Marathon Petroleum is paying out dividends at all, instead of re-investing into the business to generate higher cash flows in the future. It may be beneficial exploring other income stocks as alternatives to MPC or even look at high-growth stocks to supplement your steady income stocks. I encourage you to continue your research by taking a look at my interactive free list of dividend rockstars as well as high-growth stocks to potentially add to your holdings.

Are you a potential investor? After digging a little deeper into MPC’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, MPC could still be an interesting investment opportunity. I also recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. Dig deeper in our latest free fundmental analysis to explore other aspects of MPC.


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.

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