Yahoo Finance Pembina Pipeline Corp's Dividend Analysis
Exploring the Sustainability and Growth of Pembina Pipeline Corp's Dividends
Pembina Pipeline Corp (NYSE:PBA) recently announced a dividend of $0.69 per share, payable on 2024-06-28, with the ex-dividend date set for 2024-06-17. 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 Pembina Pipeline Corp's dividend performance and assess its sustainability.
What Does Pembina Pipeline Corp Do?
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Pembina Pipeline is a midstream company serving the Canadian and North American (primarily Bakken) markets with an integrated product portfolio. Its assets include pipelines and gas gathering as well as assets across fractionation, storage, and propane exports.
A Glimpse at Pembina Pipeline Corp's Dividend History
Pembina Pipeline Corp has maintained a consistent dividend payment record since 1997. Dividends are currently distributed on a quarterly basis. Pembina Pipeline Corp has increased its dividend each year since 1998. The stock is thus listed as a dividend aristocrat, an honor that is given to companies that have increased their dividend each year for at least the past 26 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Pembina Pipeline Corp's Dividend Yield and Growth
As of today, Pembina Pipeline Corp currently has a 12-month trailing dividend yield of 5.38% and a 12-month forward dividend yield of 5.43%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, Pembina Pipeline Corp's annual dividend growth rate was 1.80%. Extended to a five-year horizon, this rate increased to 3.10% per year. And over the past decade, Pembina Pipeline Corp's annual dividends per share growth rate stands at 5.30%.
Based on Pembina Pipeline Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Pembina Pipeline Corp stock as of today is approximately 6.27%.
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 2024-03-31, Pembina Pipeline Corp's dividend payout ratio is 0.97, which may suggest that the company's dividend may not be sustainable.
Pembina Pipeline Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Pembina Pipeline Corp's profitability 8 out of 10 as of 2024-03-31, suggesting good profitability prospects. The company has reported net profit in 9 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. Pembina Pipeline Corp's growth rank of 8 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Pembina Pipeline Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Pembina Pipeline Corp's revenue has increased by approximately 15.20% per year on average, a rate that underperforms than approximately 54.08% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Pembina Pipeline Corp's earnings increased by approximately 18.30% per year on average, a rate that underperforms than approximately 52.52% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 4.00%, which underperforms than approximately 66.18% of global competitors.
Next Steps
Considering Pembina Pipeline Corp's consistent dividend payments, growth in dividend rate, and a robust profitability rank, the company presents an appealing option for dividend-seeking investors. However, the high payout ratio and underperformance in some growth metrics suggest caution. Investors should monitor these indicators to ensure the sustainability of future dividends. 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.
This article first appeared on GuruFocus.
