APA Group (ASX:APA) Has Announced A Dividend Of A$0.275
Simply Wall St
Sat, December 27, 2025 at 5:03 PM EST
2 min read
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The board of APA Group (ASX:APA) has announced that it will pay a dividend of A$0.275 per share on the 18th of March. This makes the dividend yield 6.1%, which is above the industry average.
APA Group's Future Dividends May Potentially Be At Risk
We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable. Before making this announcement, the company's dividend was much higher than its earnings. This situation certainly isn't ideal, and could place significant strain on the balance sheet if it continues.
Over the next year, EPS is forecast to grow rapidly. If recent patterns in the dividend continues, we would start to get a bit worried, with the payout ratio possibly reaching 221%.
See our latest analysis for APA Group
APA Group Has A Solid Track Record
The company has an extended history of paying stable dividends. The dividend has gone from an annual total of A$0.363 in 2015 to the most recent total annual payment of A$0.57. This works out to be a compound annual growth rate (CAGR) of approximately 4.6% a year over that time. Dividends have grown relatively slowly, which is not great, but some investors may value the relative consistency of the dividend.
Dividend Growth Potential Is Shaky
Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. However, initial appearances might be deceiving. Over the past five years, it looks as though APA Group's EPS has declined at around 19% a year. Dividend payments are likely to come under some pressure unless EPS can pull out of the nosedive it is in. However, the next year is actually looking up, with earnings set to rise. We would just wait until it becomes a pattern before getting too excited.
The Dividend Could Prove To Be Unreliable
Overall, this is probably not a great income stock, even though the dividend is being raised at the moment. Although they have been consistent in the past, we think the payments are a little high to be sustained. We would be a touch cautious of relying on this stock primarily for the dividend income.
Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. However, there are other things to consider for investors when analysing stock performance. Just as an example, we've come across 3 warning signs for APA Group you should be aware of, and 2 of them can't be ignored. Is APA Group not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.
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