Dividends play an important role in compounding returns in the long run and end up forming a sizeable part of investment returns. In the past 10 years Ferrellgas Partners LP. (NYSE:FGP) has returned an average of 10.00% per year to investors in the form of dividend payouts. Should it have a place in your portfolio? Let’s take a look at Ferrellgas Partners in more detail. Check out our latest analysis for Ferrellgas Partners
How I analyze a dividend stock
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
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Does it pay an annual yield higher than 75% 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 it increased its dividend per share amount over the past?
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Is it able to pay the current rate of dividends from its earnings?
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Will it have the ability to keep paying its dividends going forward?
How well does Ferrellgas Partners fit our criteria?
The current payout ratio for FGP is negative, which means that it is loss-making, and paying its dividend from its retained earnings. Reliablity is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. Dividend payments from Ferrellgas Partners have been volatile in the past 10 years, with some years experiencing significant drops of over 25%. These characteristics do not bode well for income investors seeking reliable stream of dividends. Relative to peers, Ferrellgas Partners produces a yield of 12.66%, which is high for Gas Utilities stocks.
Next Steps:
Whilst there are few things you may like about Ferrellgas Partners from a dividend stock perspective, the truth is that overall it probably is not the best choice for a dividend investor. However, if you are not strictly just a dividend investor, the stock could still offer some interesting investment opportunities. Given that this is purely a dividend analysis, you should always research extensively before deciding whether or not a stock is an appropriate investment for you. I always recommend analysing the company’s fundamentals and underlying business before making an investment decision. Below, I’ve compiled three relevant aspects you should further examine:
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Future Outlook: What are well-informed industry analysts predicting for FGP’s future growth? Take a look at our free research report of analyst consensus for FGP’s outlook.
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Historical Performance: What has FGP’s returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
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Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.
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.