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On the 15 March 2018, Pembina Pipeline Corporation (TSX:PPL) will be paying shareholders an upcoming dividend amount of CA$0.18 per share. However, investors must have bought the company’s stock before 22 February 2018 in order to qualify for the payment. That means you have only 3 days left! Is this future income stream a compelling catalyst for dividend investors to think about the stock as an investment today? Let’s take a look at Pembina Pipeline’s most recent financial data to examine its dividend characteristics in more detail. Check out our latest analysis for Pembina Pipeline

Here’s how I find good dividend stocks

Whenever I am looking at a potential dividend stock investment, I always check these five metrics:

• Does it pay an annual yield higher than 75% of dividend payers?

• Does it consistently pay out dividends without missing a payment of significantly cutting payout?

• Has dividend per share risen in the past couple of years?

• Does earnings amply cover its dividend payments?

• Will the company be able to keep paying dividend based on the future earnings growth?

How does Pembina Pipeline fare?

Pembina Pipeline has a trailing twelve-month payout ratio of 158.05%, meaning the dividend is not sufficiently covered by its earnings. In the near future, analysts are predicting a lower payout ratio of 104.56%, leading to a dividend yield of around 5.59%. However, EPS should increase to CA$1.86, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. PPL has increased its DPS from CA$1.44 to CA$2.16 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. These are all positive signs of a great, reliable dividend stock. Compared to its peers, Pembina Pipeline has a yield of 5.24%, which is high for Oil and Gas stocks.

Next Steps:

With these dividend metrics in mind, I definitely rank Pembina Pipeline as a strong income stock, and is worth further research for anyone who considers dividends an important part of their portfolio strategy. Given that this is purely a dividend analysis, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. I’ve put together three important factors you should look at:

• 1. Future Outlook: What are well-informed industry analysts predicting for PPL’s future growth? Take a look at our free research report of analyst consensus for PPL’s outlook.

• 2. Valuation: What is PPL worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether PPL is currently mispriced by the market.

• 3. Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.

To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.