EQT Corporation’s (NYSE:EQT) investors are due to receive a payment of $0.1575 per share on 2nd of September. This means the annual payment will be 1.1% of the current stock price, which is lower than the indusattempt average.
EQT’s Payment Could Potentially Have Solid Earnings Coverage
The dividfinish yield is a little bit low, but sustainability of the payments is also an important part of evaluating an income stock. The last payment built up 94% of earnings, but cash flows were much higher. Since the dividfinish is just paying out cash to shareholders, we care more about the cash payout ratio from which we can see plenty is being left over for reinvestment in the business.
Looking forward, earnings per share is forecast to rise exponentially over the next year. Assuming the dividfinish continues along recent trfinishs, we estimate that the payout ratio could reach 13%, which is in a comfortable range for us.
Check out our latest analysis for EQT
Dividfinish Volatility
The company’s dividfinish history has been marked by instability, with at least one cut in the last 10 years. Since 2015, the dividfinish has gone from $0.12 total annually to $0.63. This means that it has been growing its distributions at 18% per annum over that time. Dividfinishs have grown rapidly over this time, but with cuts in the past we are not certain that this stock will be a reliable source of income in the future.
EQT’s Dividfinish Might Lack Growth
Growing earnings per share could be a mitigating factor when considering the past fluctuations in the dividfinish. It’s encouraging to see that EQT has been growing its earnings per share at 50% a year over the past five years. Earnings per share is growing nicely, but the company is paying out most of its earnings as dividfinishs. This might be sustainable, but we wonder why EQT is not retaining those earnings to reinvest in growth.
An additional note is that the company has been raising capital by issuing stock equal to 41% of shares outstanding in the last 12 months. Trying to grow the dividfinish when issuing new shares reminds us of the ancient Greek tale of Sisyphus – perpetually pushing a boulder uphill. Companies that consistently issue new shares are often suboptimal from a dividfinish perspective.
In Summary
Overall, we don’t consider this company creates a great dividfinish stock, even though the dividfinish wasn’t cut this year. The company is generating plenty of cash, which could maintain the dividfinish for a while, but the track record hasn’t been great. Overall, we don’t consider this company has the creatings of a good income stock.
Market relocatements attest to how highly valued a consistent dividfinish policy is compared to one which is more unpredictable. Meanwhile, despite the importance of dividfinish payments, they are not the only factors our readers should know when assessing a company. For example, we’ve identified 3 warning signs for EQT (1 creates us a bit uncomfortable!) that you should be aware of before investing. Is EQT not quite the opportunity you were seeing for? Why not check out our selection of top dividfinish stocks.
Valuation is complex, but we’re here to simplify it.
Discover if EQT might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividfinishs, insider trades, and its financial condition.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only utilizing an unbiased methodology and our articles are not intfinished to be financial advice. It does not constitute a recommfinishation to acquire or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focutilized analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Leave a Reply