USA Compression Partners LP's Dividend Analysis
A Comprehensive Review of Dividend Performance and Sustainability
USA Compression Partners LP (NYSE:USAC) recently announced a dividend of $0.53 per share, payable on 2023-11-03, with the ex-dividend date set for 2023-10-20. 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 USA Compression Partners LP's dividend performance and assess its sustainability.
What Does USA Compression Partners LP Do?
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USA Compression Partners LP provides compression services in the United States in terms of total compression fleet horsepower to customers relating to infrastructure applications, including both allowing for the processing and transportation of natural gas through the domestic pipeline system and enhancing crude oil production through artificial lift processes. It engineers, designs, operates, services, and repairs its compression units, and maintains related support inventory and equipment. The company provides compression services in several shale plays throughout the U.S., including the Utica, Marcellus, Permian Basin, Delaware Basin, Eagle Ford, and others.
A Glimpse at USA Compression Partners LP's Dividend History
USA Compression Partners LP has maintained a consistent dividend payment record since 2013. Dividends are currently distributed on a quarterly basis. The company has increased its dividend each year since 2013, thus earning the honor of being a dividend achiever, given to companies that have increased their dividend each year for at least the past 10 years.
Breaking Down USA Compression Partners LP's Dividend Yield and Growth
As of today, USA Compression Partners LP currently has a 12-month trailing dividend yield of 8.01% and a 12-month forward dividend yield of 8.01%. This suggests an expectation of consistent dividend payments over the next 12 months. Based on USA Compression Partners LP's dividend yield and five-year growth rate, the 5-year yield on cost of USA Compression Partners LP stock as of today is approximately 8.01%.
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. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-06-30, USA Compression Partners LP's dividend payout ratio is 70.00%, which may suggest that the company's dividend may not be sustainable.
USA Compression Partners LP's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks USA Compression Partners LP's profitability 6 out of 10 as of 2023-06-30, suggesting fair profitability. The company has reported net profit in 5 years out of past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. USA Compression Partners LP's growth rank of 6 out of 10 suggests that the company has a fair growth outlook. However, the company's 3-year EPS growth rate and 5-year EBITDA growth rate underperform compared to global competitors, indicating potential challenges in sustaining dividends in the long run.
Next Steps
In conclusion, while USA Compression Partners LP has a strong history of dividend payments and a commendable yield, investors should consider the company's payout ratio and growth metrics in their analysis. The sustainability of dividends is contingent on these factors, and careful scrutiny is advised. 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.
