Read This Before Buying ONE Gas Inc (NYSE:OGS) For Its Upcoming $0.46 Dividend
Investors who want to cash in on ONE Gas Inc’s (NYSE:OGS) upcoming dividend of $0.46 per share have only 3 days left to buy the shares before its ex-dividend date, 11 May 2018, in time for dividends payable on the 01 June 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into ONE Gas’s latest financial data to analyse its dividend attributes. See our latest analysis for ONE Gas
5 questions to ask before buying a dividend stock
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
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 it increased its dividend per share amount over the past?
Is its earnings sufficient to payout dividend at the current rate?
Will it have the ability to keep paying its dividends going forward?
How well does ONE Gas fit our criteria?
ONE Gas has a trailing twelve-month payout ratio of 50.94%, which means that the dividend is covered by earnings. Going forward, analysts expect OGS’s payout to increase to 61.90% of its earnings, which leads to a dividend yield of around 2.74%. However, EPS is forecasted to fall to $3.18 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income. 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 ONE Gas 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. Relative to peers, ONE Gas generates a yield of 2.48%, which is on the low-side for Gas Utilities stocks.
Next Steps:
If ONE Gas is in your portfolio for cash-generating reasons, there may be better alternatives out there. 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 factors you should look at:
Future Outlook: What are well-informed industry analysts predicting for OGS’s future growth? Take a look at our free research report of analyst consensus for OGS’s outlook.
Historical Performance: What has OGS’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.
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.
