High-yielding S&P/ASX 200 Index (ASX: XJO) dividend stock APA Group (ASX: APA) has been on a tear since the company reported its half-year results on 24 February.
In early afternoon trade today, shares in the ASX 200 energy infrastructure company are up 0.2% at $7.87.
That sees the APA share price up 19.1% from the closing price of $6.61 a share on the last trading day before the company released its results.
While shares remain down 5.6% since this time last year, PAC Partners' James Nicolaou has a bullish outlook for the ASX 200 dividend stock (courtesy of The Bull).
Here's why.
ASX 200 dividend stock with attractive yield and potential upside
"APA is a leading infrastructure energy business," said Nicolaou, who has a buy recommendation on the ASX 200 dividend stock.
"The group reported solid first half results in fiscal year 2025," he added.
Those solid results are the first reason to buy APA shares.
Nicolau noted:
Total revenue of $1.62 billion was up 6.9% on the prior corresponding period. Underlying EBITDA [earnings before interest, taxes, depreciation and amortisation] of $1.015 billion was up 9.1% marginally exceeding forecasts and underpinning strong full year guidance of between $1.96 billion and $2.02 billion amid a distribution forecast of 57 cents per security.
The second reason Nicolaou is bullish on APA stock is management's tight control on costs.
"Effective cost controls continue to keep expense growth below inflation levels," he said.
As for the third reason passive income investors may wish to add APA stock to their portfolios, Nicolaou said, "APA's defensive infrastructure profile offers an attractive dividend yield and potential upside from anticipated interest rate reductions."
What kind of dividend yield are APA shares offering?
Atop the potential for share price gains, APA has captured the interest of passive income investors after increasing its full year dividend payouts every year for more than a decade now.
On 18 September, the ASX 200 dividend stock paid out a final dividend of 29.5 cents per share, franked at 20%. That was up from the prior final dividend of 20.0 cents per share, which was unfranked.
Last week, 17 March, eligible investors will have received the interim dividend of 27.0 cents per share, franked at 10%. The FY 2025 interim dividend was up from the unfranked FY 2024 interim dividend of 26.5 cents per share.
This equates to a payout over the past 12 months of 56.5 cents a share.
At the current APA share price of $7.87, that sees this ASX 200 dividend stock trading on a partly franked trailing yield of 7.2%.
