Delving Into Antero Midstream Corp's Upcoming Dividend
Antero Midstream Corp (AM, Financial) recently announced a dividend of $0.23 per share, payable on 2024-02-07, with the ex-dividend date set for 2024-01-23. 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 Antero Midstream Corp's dividend performance and assess its sustainability.
What Does Antero Midstream Corp Do?
Antero Midstream Corp is a midstream company that owns, operates, and develops midstream energy infrastructure services and production activity in the Appalachian Basin's Marcellus Shale and Utica Shale located in West Virginia and Ohio. The company has two operating segments; the Gathering and Processing segment includes a network of gathering pipelines and compressor stations that collect and process production from Antero Resources wells in West Virginia and Ohio and the Water Handling segment includes two independent systems that deliver water from sources including the Ohio River, local reservoirs and several regional waterways. It derives a majority of its revenue from the Gathering and Processing segment.
A Glimpse at Antero Midstream Corp's Dividend History
Antero Midstream Corp has maintained a consistent dividend payment record since 2017. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Antero Midstream Corp's Dividend Yield and Growth
As of today, Antero Midstream Corp currently has a 12-month trailing dividend yield of 7.41% and a 12-month forward dividend yield of 7.41%. This suggests an expectation of same dividend payments over the next 12 months.
Over the past three years, Antero Midstream Corp's annual dividend growth rate was -6.00%. Extended to a five-year horizon, this rate increased to 50.00% per year. Based on Antero Midstream Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Antero Midstream Corp stock as of today is approximately 56.27%.
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 2023-09-30, Antero Midstream Corp's dividend payout ratio is 1.23, which may suggest that the company's dividend may not be sustainable.
Antero Midstream Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Antero Midstream Corp's profitability 6 out of 10 as of 2023-09-30, suggesting fair profitability. The company has reported net profit in 6 years out of past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Antero Midstream Corp's growth rank of 6 out of 10 suggests that the company has a fair growth outlook. Revenue is the lifeblood of any company, and Antero Midstream Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Antero Midstream Corp's revenue has increased by approximately 2.40% per year on average, which underperforms approximately 66.71% 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, Antero Midstream Corp's earnings increased by approximately 7.40% per year on average, which underperforms approximately 65.07% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 68.60%, which underperforms approximately 2.64% of global competitors.
Next Steps
Considering Antero Midstream Corp's upcoming dividend payment, its historical dividend consistency, and the current dividend yield, investors have several metrics to evaluate. While the dividend growth rate and yield on cost paint an attractive picture, the sustainability of these dividends is less certain given the payout ratio and mixed performance in growth and profitability metrics. It is essential for investors to weigh these factors, alongside broader market conditions and individual investment strategies, when making decisions about Antero Midstream Corp's suitability for their portfolios.
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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.
