Sunoco LP's Dividend Analysis
A Comprehensive Look at SUN's Dividend Performance and Sustainability
Sunoco LP(NYSE:SUN) recently announced a dividend of $0.84 per share, payable on 2023-11-20, with the ex-dividend date set for 2023-10-27. 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 look into Sunoco LPs dividend performance and assess its sustainability.
What Does Sunoco LP Do?
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Sunoco LP is a Delaware limited partnership formed in June 2012 by Susser Holdings Corporation or SUSS. The company, along with its wholly owned subsidiary, is an independent motor fuel distributor by gallons in Texas, and among the distributors of Valero and Chevron branded motor fuel in the United States. SUSS operated approximately 580 retail convenience stores under its proprietary Stripes convenience store brand at year-end, mainly in growing Texas markets. Stripes is an independent chain of convenience stores in Texas based on store count and retail motor fuel volumes sold.
A Glimpse at Sunoco LP's Dividend History
Sunoco LP has maintained a consistent dividend payment record since 2012. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 11 years.
Breaking Down Sunoco LP's Dividend Yield and Growth
As of today, Sunoco LP currently has a 12-month trailing dividend yield of 6.51% and a 12-month forward dividend yield of 6.58%. This suggests an expectation of increased dividend payments over the next 12 months. And over the past decade, Sunoco LP's annual dividends per share growth rate stands at an impressive 28.90%.
The Sustainability Question: 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. As of 2023-06-30, Sunoco LP's dividend payout ratio is 0.99. This may suggest that the company's dividend may not be sustainable.
Sunoco LP's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Sunoco LP's profitability 7 out of 10 as of 2023-06-30, suggesting good profitability prospects. The company has reported net profit in 7 years out of past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Sunoco 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 Sunoco LP's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Sunoco LP's revenue has increased by approximately 15.20% per year on average, a rate that outperforms approximately 59.51% 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, Sunoco LP's earnings increased by approximately 18.40% per year on average, a rate that outperforms approximately 45.19% of global competitors.
Next Steps
In conclusion, Sunoco LP's consistent dividend payments, impressive dividend growth rate, and strong growth metrics make it a compelling choice for investors seeking steady income. However, its high payout ratio and the sustainability of its dividend remain areas of concern. Investors should continue to monitor these factors closely. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
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.
