On the 15 December 2017, Ferrellgas Partners LP (NYSE:FGP) will be paying shareholders an upcoming dividend amount of $0.1 per share. However, investors must have bought the company’s stock before 07 December 2017 in order to qualify for the payment. That means you have only 3 days left! Should you diversify into FGP and boost your portfolio income stream? Well, keep on reading because today, I’m going to look at the latest data and analyze the stock and its dividend property in further detail. See our latest analysis for FGP
5 checks you should use to assess a dividend stock
If you are a dividend investor, you should always assess these five key metrics:
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Is it the top 25% annual dividend yield payer?
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Has it paid dividend every year without dramatically reducing payout in the past?
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Has the amount of dividend per share grown over the past?
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Does earnings amply cover its dividend payments?
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Will it be able to continue to payout at the current rate in the future?
How does Ferrellgas Partners fare?
Ferrellgas Partners has a negative payout ratio, meaning that the company is not yet profitable and is paying dividend by dipping into its retained earnings. If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. Not only have dividend payouts from Ferrellgas Partners fallen over the past 10 years, it has also been highly volatile during this time, with drops of over 25% in some years. This means that dividend hunters should probably steer clear of the stock, at least for now until the track record improves. In terms of its peers, Ferrellgas Partners produces a yield of 8.75%, which is high for gas utilities stocks.
What this means for you:
Are you a shareholder? You may be wondering why Ferrellgas Partners is paying out dividends at all, instead of re-investing into the business to generate higher cash flows in the future. It may be beneficial exploring other income stocks as alternatives to FGP or even look at high-growth stocks to supplement your steady income stocks. I encourage you to continue your research by exploring my interactive free list of dividend rockstars as well as high-growth stocks to potentially add to your holdings.
Are you a potential investor? After digging a little deeper into FGP’s yield, it’s easy to see why you should be cautious investing in the company just for the dividend. But if you are not exclusively a dividend investor, FGP could still be an interesting investment opportunity. I also recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. Take a look at our latest free fundmental analysis to explore other aspects of FGP.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.