PHX Minerals Inc.’s (NYSE:PHX) dividend will be increasing from last year’s payment of the same period to $0.04 on 6th of September. This takes the annual payment to 4.7% of the current stock price, which is about average for the industry.
See our latest analysis for PHX Minerals
PHX Minerals’ Payment Has Solid Earnings Coverage
We like to see a healthy dividend yield, but that is only helpful to us if the payment can continue. Prior to this announcement, PHX Minerals’ dividend was making up a very large proportion of earnings, and the company was also not generating any cash flow to offset this. This is a pretty unsustainable practice, and could be risky if continued for the long term.
Over the next year, EPS is forecast to expand by 57.7%. If the dividend continues along recent trends, we estimate the payout ratio will be 52%, which is in the range that makes us comfortable with the sustainability of the dividend.
