Equitrans Midstream Corporation (NYSE:ETRN) is set to distribute a higher-than-average dividend of $0.15 on the scheduled date of November 14th, which corresponds to an annual payment of 6.8% of its stock price. The company's payout ratio is currently below 75% of its free cash flow, allowing for ample reinvestment opportunities.
This comes despite the firm's troubled history with dividends, having seen a reduction from $1.64 in 2018 to $0.60. Compounding this issue is a concerning 48% annual EPS decline rate over the past five years. However, analysts are forecasting an EPS increase in the upcoming year that could reduce the payout ratio to 37%, suggesting potential dividend sustainability.
While these business challenges warrant cautious optimism, it will be crucial to see a consistent upward trend in EPS before any definitive conclusions can be made about the company's financial health and dividend stability.
InvestingPro Insights
According to real-time data from InvestingPro, Equitrans Midstream Corporation has a market capitalization of $3830M USD, a P/E ratio of -12.07, and generated a revenue of $1381.8M USD in Q2 2023. This data indicates the company's significant market presence and its ability to generate substantial revenue.
In line with our InvestingPro Tips, the company's revenue growth has been accelerating and it boasts impressive gross profit margins. Additionally, the company pays a significant dividend to shareholders, aligning with the article's focus on the company's dividend payout. Despite not being profitable over the last twelve months, analysts predict the company will be profitable this year. This could potentially improve the company's financial health and contribute to dividend stability.
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