Important news for shareholders and potential investors in Enterprise Products Partners LP. (NYSE:EPD): The dividend payment of $0.43 per share will be distributed into shareholder on 08 May 2018, and the stock will begin trading ex-dividend at an earlier date, 27 April 2018. Is this future income stream a compelling catalyst for dividend investors to think about the stock as an investment today? Let’s take a look at Enterprise Products Partners’s most recent financial data to examine its dividend characteristics in more detail. See our latest analysis for Enterprise Products Partners
5 questions to ask before buying a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
- Is its annual yield among the top 25% of dividend-paying companies?
- Does it consistently pay out dividends without missing a payment of significantly cutting payout?
- Has dividend per share risen in the past couple of years?
- Does earnings amply cover its dividend payments?
- Will the company be able to keep paying dividend based on the future earnings growth?
How does Enterprise Products Partners fare?Enterprise Products Partners has a trailing twelve-month payout ratio of 129.66%, which means that the dividend is not well-covered by its earnings. In the near future, analysts are predicting a lower payout ratio of 105.06%, leading to a dividend yield of around 6.87%. However, EPS should increase to $1.52, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. Reliablity is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. In the case of EPD it has increased its DPS from $1.01 to $1.71 in the past 10 years. It has also been paying out dividend consistently during this time, as you’d expect for a company increasing its dividend levels. These are all positive signs of a great, reliable dividend stock. In terms of its peers, Enterprise Products Partners produces a yield of 6.43%, which is high for Oil and Gas stocks.
Considering the dividend attributes we analyzed above, Enterprise Products Partners is definitely worth keeping an eye on for someone looking to build a dedicated income portfolio. 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. Below, I’ve compiled three key factors you should look at:
- Future Outlook: What are well-informed industry analysts predicting for EPD’s future growth? Take a look at our free research report of analyst consensus for EPD’s outlook.
- Valuation: What is EPD worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether EPD is currently mispriced by the market.
- Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.