An In-depth Look at Aker BP ASA's Dividend Performance and Sustainability
Aker BP ASA (AKRBF, Financial) recently announced a dividend of $6.19 per share, payable on 2023-11-09, with the ex-dividend date set for 2023-11-01. As investors anticipate this upcoming payment, the company's dividend history, yield, and growth rates come under scrutiny. Using data from GuruFocus, we delve into Aker BP ASA's dividend performance and evaluate its sustainability.
About Aker BP ASA
Aker BP ASA operates oil and gas production, development, and exploration projects on the Norwegian Continental Shelf (NCS). Its projects include Alvheim field, Ivar Aasen, Skarv, and Valhall. Revenue is primarily derived from a short list of clients and consists mostly of liquid sales. The Alvheim field, developed with an FPSO, contributes the most volume for the company. Fields in close proximity to Alvheim are tied to Alvheim's FPSO. From the tiebacks, oil is transported from the field with shuttle tankers, and associated gas is exported to Scotland through a gas evacuation system.
Aker BP ASA's Dividend History
Since 2016, Aker BP ASA has maintained a consistent dividend payment record, with dividends currently distributed on a quarterly basis. The chart below shows the annual Dividends Per Share for tracking historical trends.
Aker BP ASA's Dividend Yield and Growth
As of today, Aker BP ASA has a 12-month trailing dividend yield of 7.52% and a 12-month forward dividend yield of 7.58%, indicating an expected increase in dividend payments over the next 12 months. Over the past three years, Aker BP ASA's annual dividend growth rate was 1.90%. Extended to a five-year horizon, this rate increased to 17.30% per year. Based on Aker BP ASA's dividend yield and five-year growth rate, the 5-year yield on cost of Aker BP ASA stock as of today is approximately 16.70%.
Payout Ratio and Profitability: Assessing Dividend Sustainability
To assess the sustainability of the dividend, it's crucial 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, Aker BP ASA's dividend payout ratio is 1.22, suggesting potential sustainability concerns.
Aker BP ASA's profitability rank of 8 out of 10 as of 2023-09-30 indicates good profitability prospects. The company has reported net profit in 7 years out of the past 10 years.
Growth Metrics: The Future Outlook
Aker BP ASA's growth rank of 8 out of 10 suggests a good growth trajectory relative to its competitors. Its revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Aker BP ASA's revenue has increased by approximately 45.30% per year on average, a rate that outperforms approximately 91.19% of global competitors. Furthermore, 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, Aker BP ASA's earnings increased by approximately 108.50% per year on average, a rate that outperforms approximately 92.72% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 26.90% outperforms approximately 76% of global competitors.
Conclusion
Looking at Aker BP ASA's dividend payments, dividend growth rate, payout ratio, profitability, and growth metrics, the company exhibits a mixed picture. While it boasts strong growth metrics and profitability rank, its high payout ratio raises concerns about the sustainability of its dividend. Investors should continue to monitor these metrics and consider their risk tolerance and investment strategy when deciding to invest in Aker BP ASA.
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.
