Is Apollo Global Management LLC (NYSE:APO) A Great Dividend Stock?

Dividends play a key role in compounding returns over time and can form a large part of our portfolio return. Over the past 7 years, Apollo Global Management LLC (NYSE:APO) has returned an average of 9.00% per year to shareholders in terms of dividend yield. Does Apollo Global Management tick all the boxes of a great dividend stock? Below, I’ll take you through my analysis. Check out our latest analysis for Apollo Global Management

5 checks you should use to assess a dividend stock

When researching a dividend stock, I always follow the following screening criteria:

• Is it paying an annual yield above 75% of dividend payers?

• Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?

• Has it increased its dividend per share amount over the past?

• Can it afford to pay the current rate of dividends from its earnings?

• Based on future earnings growth, will it be able to continue to payout dividend at the current rate?

NYSE:APO Historical Dividend Yield June 25th 18

How well does Apollo Global Management fit our criteria?

The company currently pays out 97.75% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is not well-covered by its earnings. In the near future, analysts are predicting a more sensible payout ratio of 86.57%, leading to a dividend yield of around 8.27%.

If dividend is a key criteria in your investment consideration, then you need to make sure the dividend stock you’re eyeing out is reliable in its payments. The reality is that it is too early to consider Apollo Global Management as a dividend investment. It has only been consistently paying dividends for 7 years, however, standard practice for reliable payers is to look for a 10-year minimum track record.

In terms of its peers, Apollo Global Management generates a yield of 6.48%, which is high for Capital Markets stocks.

Next Steps:

Taking all the above into account, Apollo Global Management is a complicated pick for dividend investors given that there are a couple of positive things about it as well as negative. But if you are not exclusively a dividend investor, the stock could still be an interesting investment opportunity. Given that this is purely a dividend analysis, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. Below, I’ve compiled three key aspects you should look at:

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

2. Valuation: What is APO 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 APO is currently mispriced by the market.

3. 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.