Assessing the Sustainability of Avance Gas Holding Ltd's Upcoming Dividend
Avance Gas Holding Ltd (AVACF, Financial) recently announced a dividend of $0.65 per share, payable on 2024-02-29, with the ex-dividend date set for 2024-02-20. 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 Avance Gas Holding Ltd's dividend performance and assess its sustainability.
What Does Avance Gas Holding Ltd Do?
Avance Gas Holding Ltd operates within the energy sector, specializing in the transportation of liquefied petroleum gas (LPG). With a fleet of very large gas carriers (VLGCs), the company offers global transportation services to oil majors and LPG traders. Avance Gas Holding Ltd transports LPG to various destinations, including Europe, South America, India, and Asia, with loading points primarily in the Middle East Gulf and the United States Gulf/East Coast. Operating in a niche market, the company's services are crucial for the LPG supply chain.
A Glimpse at Avance Gas Holding Ltd's Dividend History
Avance Gas Holding Ltd has upheld a commendable record of dividend payments since 2020, distributing dividends to shareholders on a quarterly basis. This consistent payout is an important factor for income-focused investors. To visualize the trend, here is a chart illustrating the annual Dividends Per Share, which provides historical insight into the company's dividend policy.
Breaking Down Avance Gas Holding Ltd's Dividend Yield and Growth
Currently, Avance Gas Holding Ltd boasts a trailing dividend yield of 16.50% and a forward dividend yield of 21.45%, indicating an anticipated increase in dividend payments over the next 12 months. This forward-looking yield positions the company as an attractive option for dividend investors. Additionally, the 5-year yield on cost for Avance Gas Holding Ltd stock stands at 16.50%, reinforcing the potential long-term benefits for shareholders.
The Sustainability Question: Payout Ratio and Profitability
The dividend payout ratio is a critical measure of a company's ability to sustain its dividends. As of September 30, 2023, Avance Gas Holding Ltd's dividend payout ratio is 1.02, which may raise concerns about the sustainability of its dividend payments. However, the company's profitability rank of 7 out of 10 suggests strong profitability, with the company reporting net profits in 6 of the past 10 years.
Growth Metrics: The Future Outlook
For dividend sustainability, growth metrics are essential. Avance Gas Holding Ltd's growth rank of 7 out of 10 indicates a positive growth trajectory. Despite a -2.60% average annual decrease in revenue, which lags behind 74.91% of global competitors, the company's 3-year EPS growth rate of 4.20% per year, although lower than 68.72% of global competitors, still demonstrates the ability to increase earnings over time.
Concluding Thoughts on Avance Gas Holding Ltd's Dividend Prospects
Avance Gas Holding Ltd's robust dividend yield, consistent dividend history, and solid profitability rank paint a mixed picture for dividend investors. While the payout ratio and growth metrics raise some concerns, the company's overall financial health and market position suggest that Avance Gas Holding Ltd may continue to be a viable dividend payer. Investors should weigh these factors carefully and consider the company's future prospects in the context of the global energy market and LPG transportation industry trends. For those seeking high-dividend yield opportunities, GuruFocus Premium offers the High Dividend Yield Screener to discover similar investment options.
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.
