Have you been keeping an eye on Antero Midstream GP LP’s (NYSE:AMGP) upcoming dividend of $0.11 per share payable on the 23 May 2018? Then you only have 3 days left before the stock starts trading ex-dividend on the 02 May 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine Antero Midstream GP’s latest financial data to analyse its dividend characteristics. View our latest analysis for Antero Midstream GP
5 questions to ask before buying a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
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Is their annual yield among the top 25% of dividend payers?
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Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
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Has dividend per share amount increased over the past?
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Does earnings amply cover its dividend payments?
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Will it have the ability to keep paying its dividends going forward?
How does Antero Midstream GP fare?
Antero Midstream GP has a trailing twelve-month payout ratio of 135.20%, which means that the dividend is not well-covered by its earnings. Going forward, analysts expect AMGP’s payout to remain around the same level at 138.47% of its earnings, which leads to a dividend yield of 7.20%. In addition to this, EPS should increase to $0.63. If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. The reality is that it is too early to consider Antero Midstream GP as a dividend investment. It has only been paying out dividend for the past one year. Generally, the rule of thumb for determining whether a stock is a reliable dividend payer is that it should be consistently paying dividends for the past 10 years or more. Clearly there’s a long road ahead before we can ascertain whether AMGP one as a stable dividend player. Relative to peers, Antero Midstream GP has a yield of 2.50%, which is on the low-side for Oil and Gas stocks.
Next Steps:
After digging a little deeper into Antero Midstream GP’s yield, it’s easy to see why you should be cautious investing in the company just for the dividend. On the other hand, if you are not strictly just a dividend investor, the stock could still be offering some interesting investment opportunities. Given that this is purely a dividend analysis, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. Below, I’ve compiled three essential aspects you should look at: