A Deep Dive into the Dividend Performance of New Fortress Energy Inc (NFE, Financial)
New Fortress Energy Inc(NFE) recently announced a dividend of $0.1 per share, payable on 2023-09-27, with the ex-dividend date set for 2023-09-12. 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 deep dive into New Fortress Energy Incs dividend performance and assess its sustainability.
What Does New Fortress Energy Inc Do?
New Fortress Energy is an integrated gas-to-power company. Its business model spans the entire production and delivery chain from natural gas procurement and liquefaction to logistics, shipping, terminals, and conversion or development of a natural gas-fired generation. It has invested in floating, liquefied natural gas vessels to both lower the cost of acquiring gas while securing a long-term supply for its terminals. Its segments include terminals and infrastructure, or T&I, and ships.
A Glimpse at New Fortress Energy Inc's Dividend History
New Fortress Energy Inc has maintained a consistent dividend payment record since 2020. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down New Fortress Energy Inc's Dividend Yield and Growth
As of today, New Fortress Energy Inc currently has a 12-month trailing dividend yield of 10.50% and a 12-month forward dividend yield of 1.26%. This suggests an expectation of decrease dividend payments over the next 12 months. Based on New Fortress Energy Inc's dividend yield and five-year growth rate, the 5-year yield on cost of New Fortress Energy Inc stock as of today is approximately 10.50%.
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, New Fortress Energy Inc's dividend payout ratio is 1.80. This may suggest that the company's dividend may not be sustainable.
New Fortress Energy Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks New Fortress Energy Inc's profitability 4 out of 10 as of 2023-06-30, suggesting the dividend may not be sustainable. The company has reported net profit in 2 years out of past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. New Fortress Energy Inc's growth rank of 4 out of 10 suggests that the company has poor growth prospects and thus, the dividend may not be sustainable. Revenue is the lifeblood of any company, and New Fortress Energy Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. New Fortress Energy Inc's revenue has increased by approximately 7.60% per year on average, a rate that underperforms than approximately 50.62% of global competitors.
Next Steps
In conclusion, while New Fortress Energy Inc has a history of consistent dividend payments, its high payout ratio and relatively low profitability and growth metrics suggest that the sustainability of its dividends may be in question. Investors should therefore monitor these factors closely. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
