Assessing the Sustainability of New Fortress Energy Inc's Dividend
New Fortress Energy Inc (NFE, Financial) recently announced a dividend of $0.1 per share, payable on 2023-12-27, with the ex-dividend date set for 2023-12-12. 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 look into New Fortress Energy Inc's 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 8.71% and a 12-month forward dividend yield of 1.06%. This suggests an expectation of decreased 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 8.71%.
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 2023-09-30, New Fortress Energy Inc's dividend payout ratio is 1.79, which 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 2023-09-30, suggesting the dividend may not be sustainable. The company has reported net profit in 2 years out of the 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 approximately 51.34% of global competitors.
Concluding Thoughts on New Fortress Energy Inc's Dividends
While New Fortress Energy Inc's commitment to dividend payments is evident, its growth metrics and profitability rankings raise questions about the long-term sustainability of its dividend program. The payout ratio, while currently low, may not fully capture the potential for future dividend cuts if profitability does not improve. Investors should consider these factors when evaluating the attractiveness of New Fortress Energy Inc as a dividend-paying stock. 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.
