A large part of investment returns can be generated by dividend-paying stock given their role in compounding returns over time. CVR Energy Inc (NYSE:CVI) has returned to shareholders over the past 6 years, an average dividend yield of 8.00% annually. Should it have a place in your portfolio? Let’s take a look at CVR Energy in more detail.
Here’s how I find good dividend stocks
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?
- Does it consistently pay out dividends without missing a payment of significantly cutting payout?
- Has the amount of dividend per share grown over the past?
- Does earnings amply cover its dividend payments?
- Will the company be able to keep paying dividend based on the future earnings growth?
How well does CVR Energy fit our criteria?
The current trailing twelve-month payout ratio for the stock is 62.36%, meaning the dividend is sufficiently covered by earnings. Going forward, analysts expect CVI’s payout to remain around the same level at 60.59% of its earnings, which leads to a dividend yield of 7.52%.
If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. The reality is that it is too early to consider CVR Energy 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.
In terms of its peers, CVR Energy has a yield of 7.97%, which is high for Oil and Gas stocks.
Taking into account the dividend metrics, CVR Energy ticks most of the boxes as a strong dividend investment, putting it in my list of top dividend payers. Given that this is purely a dividend analysis, you should always research extensively before deciding whether or not a stock is an appropriate investment for you. I always recommend analysing the company’s fundamentals and underlying business before making an investment decision. There are three essential aspects you should look at:
- Future Outlook: What are well-informed industry analysts predicting for CVI’s future growth? Take a look at our free research report of analyst consensus for CVI’s outlook.
- Historical Performance: What has CVI’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.
- Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.