Texas-based EXCO Resources Inc. (XCO) has increased its quarterly common stock dividend by 25.0% to 5 cents per share (20 cents per share annualized). The new dividend will be paid on Mar 29, 2013 to shareholders of record as of Mar 15.
The hike reflects continued strength in the company’s performance, backed by solid operating results and investments, along with diligent execution of its strategic plans. We believe that the company will be able to generate sufficient cash flows for its shareholders in the coming years, backed by strong operating performances and good management decisions. Prior to this revision, in Aug 2010, the company had increased its quarterly dividend by 33.0%.
As of Dec 31, 2012, the company had $45.6 million in cash and cash equivalents and a debt of $1,849.0 million. Moreover, it paid common stock dividends amounting to $34.4 million during 2012.
We believe that the increase in dividend will boost investors’ confidence in the stock, thereby driving share value.
EXCO is an independent oil and natural gas company. Its main operations are in East Texas, North Louisiana, Appalachia and the Permian. The company is involved in exploration, exploitation, development and production of onshore oil and natural gas properties.
As is the case with other independent exploration and production (E&P) companies, EXCO’s results are directly exposed to oil and gas prices, which are inherently volatile and subject to complex market forces.
The company currently carries a Zacks Rank #3 (Hold). But there are other E&P companies that are expected to perform well in the coming 1 to 3 months. These include Linn Co LLC (LNCO) with a Zacks Rank #1 (Strong Buy) as well as Hyperdynamics Corporation (HDY) and BreitBurn Energy Partners L.P. (BBEP) with Zacks Rank #2 (Buy).
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