Exploring the Sustainability and Performance of Dividends
Upcoming Dividend Details
Equitrans Midstream Corp (ETRN, Financial) recently announced a dividend of $0.15 per share, payable on 2024-05-15, with the ex-dividend date set for 2024-05-06. 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 Equitrans Midstream Corp's dividend performance and assess its sustainability.
Company Overview
Equitrans Midstream Corp, having acquired EQM Midstream in mid-2020, now directly owns EQM's assets, which include gathering, transmission, and water services. These services cater primarily to Appalachian producers in Pennsylvania, West Virginia, and Ohio. This strategic consolidation enhances Equitrans Midstream Corp's operational efficiency and market presence.
Historical Dividend Performance
Since 2019, Equitrans Midstream Corp has maintained a steady record of quarterly dividend payments. The consistency in dividend distribution highlights the company's commitment to returning value to its shareholders.
Dividend Yield and Growth Insights
Currently, Equitrans Midstream Corp boasts a trailing dividend yield of 4.39% and a forward dividend yield of 4.39%, indicating stable dividend expectations over the next year. However, the annual dividend growth rate over the past three years was -12.60%, reflecting some challenges in maintaining growth rates.
Evaluating Dividend Sustainability
The dividend payout ratio, which currently stands at 0.64, is crucial for assessing whether the company can sustain its dividend payments. A lower payout ratio generally indicates that the company retains more earnings, which supports growth and buffers against financial downturns. Additionally, Equitrans Midstream Corp's profitability rank of 6 out of 10, alongside a history of net profit in 5 out of the last 10 years, suggests fair profitability.
Future Growth Prospects
For dividends to be sustainable, underlying company growth is essential. Equitrans Midstream Corp's growth rank of 6 suggests a fair outlook. However, its revenue and earnings growth rates have underperformed relative to global competitors, with a 3-year revenue decline of -10.10% annually and a 3-year EPS decline of -11.70%. The 5-year EBITDA growth rate also lags significantly, at -26.30%.
Conclusion: Assessing the Viability of Continued Dividend Payments
While Equitrans Midstream Corp has demonstrated a commitment to consistent dividend payments, the negative growth rates in revenue, earnings, and EBITDA pose challenges to future dividend sustainability. Investors should closely monitor these metrics and consider the company's ability to reverse these trends when evaluating the stock for dividend income. For further analysis and to explore other high-dividend yield opportunities, consider using the High Dividend Yield Screener available to GuruFocus Premium users.
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.
