VOC Energy Trust's Dividend Analysis
Exploring the Sustainability and Growth of VOC Energy Trust's Dividends
VOC Energy Trust (NYSE:VOC) recently announced a dividend of $0.23 per share, payable on 2023-11-14, 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 VOC Energy Trusts dividend performance and assess its sustainability.
What Does VOC Energy Trust Do?
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VOC Energy Trust is a statutory trust. It is created to acquire and hold a term net profits interest for the benefit of the Trust unitholders. The underlying properties include VOC Brazos' net interests which are located in the states of Kansas and Texas. The trust is entitled to receive most of the net proceeds from the sale of production of oil and natural gas attributable to the underlying properties.
A Glimpse at VOC Energy Trust's Dividend History
VOC Energy Trust has maintained a consistent dividend payment record since 2011. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down VOC Energy Trust's Dividend Yield and Growth
As of today, VOC Energy Trust currently has a 12-month trailing dividend yield of 11.72% and a 12-month forward dividend yield of 10.17%. This suggests an expectation of decrease dividend payments over the next 12 months.
Over the past three years, VOC Energy Trust's annual dividend growth rate was 22.40%. Extended to a five-year horizon, this rate decreased to 7.70% per year. And over the past decade, VOC Energy Trust's annual dividends per share growth rate stands at -10.40%.
Based on VOC Energy Trust's dividend yield and five-year growth rate, the 5-year yield on cost of VOC Energy Trust stock as of today is approximately 16.98%.
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, VOC Energy Trust's dividend payout ratio is 1.00. This may suggest that the company's dividend may not be sustainable.
VOC Energy Trust's profitability rank of 8 out of 10 as of 2023-06-30, suggests good profitability prospects. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. VOC Energy Trust's growth rank of 8 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and VOC Energy Trust's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. VOC Energy Trust's revenue has increased by approximately 23.00% per year on average, a rate that outperforms than approximately 74.59% 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, VOC Energy Trust's earnings increased by approximately 22.40% per year on average, a rate that outperforms than approximately 50.72% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 7.70%, outperforms than approximately 43.09% of global competitors.
Next Steps
In conclusion, while VOC Energy Trust's dividend payments and growth rates are impressive, the high payout ratio raises questions about the sustainability of its dividends. However, the company's strong profitability and growth metrics indicate a positive outlook. Investors should continue to monitor these factors closely to make informed decisions.
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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.
