Assessing the Sustainability of KNOP's Upcoming Dividend Payment
KNOT Offshore Partners LP (KNOP, Financial) recently announced a dividend of $0.03 per share, payable on 2024-02-08, with the ex-dividend date set for 2024-01-26. 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 KNOT Offshore Partners LP's dividend performance and assess its sustainability.
What Does KNOT Offshore Partners LP Do?
KNOT Offshore Partners LP owns, operates, and shuttles tankers under long-term charters in the North Sea and Brazil. The company provides crude oil loading, transportation, and storage services under time charters and bareboat charters. The Partnership is formed for acquiring ownership interests in over four shuttle tankers owned by Knutsen NYK Offshore Tankers AS (KNOT). It operates through the shuttle tanker market segment.
A Glimpse at KNOT Offshore Partners LP's Dividend History
KNOT Offshore Partners LP has maintained a consistent dividend payment record since 2013. Dividends are currently distributed on a quarterly basis. KNOT Offshore Partners LP has increased its dividend each year since 2013. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 11 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down KNOT Offshore Partners LP's Dividend Yield and Growth
As of today, KNOT Offshore Partners LP currently has a 12-month trailing dividend yield of 1.86% and a 12-month forward dividend yield of 1.86%. This suggests an expectation of the same dividend payments over the next 12 months.
Based on KNOT Offshore Partners LP's dividend yield and five-year growth rate, the 5-year yield on cost of KNOT Offshore Partners LP stock as of today is approximately 1.86%.
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, KNOT Offshore Partners LP's dividend payout ratio is 0.00.
KNOT Offshore Partners LP's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks KNOT Offshore Partners LP's profitability 7 out of 10 as of 2023-09-30, suggesting good profitability prospects. The company has reported positive net income for each year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. KNOT Offshore Partners LP's growth rank of 7 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and KNOT Offshore Partners LP's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. KNOT Offshore Partners LP's revenue has increased by approximately -6.40% per year on average, a rate that underperforms approximately 76.3% 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, KNOT Offshore Partners LP's earnings increased by approximately -36.20% per year on average, a rate that underperforms approximately 90.96% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of -16.60%, which underperforms approximately 89.47% of global competitors.
Next Steps
Considering KNOT Offshore Partners LP's consistent dividend payments and status as a dividend achiever, investors may find the stock to be a stable income-generating asset. However, the negative growth rates in revenue, earnings, and EBITDA highlight potential concerns for the long-term sustainability of these dividends. While the current payout ratio indicates a low risk of dividend cuts in the immediate future, the underlying growth metrics suggest that investors should keep an eye on the company's future earnings and revenue trajectory. Value investors, particularly those focused on dividend income, should weigh the company's historical reliability against the growth challenges it faces. For those seeking to expand their portfolio with high-dividend yield stocks, GuruFocus Premium users can utilize the High Dividend Yield Screener to identify potential opportunities.
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.
