Diamondback Energy Inc's Dividend Analysis
Assessing the Upcoming Dividend and Financial Health of Diamondback Energy Inc
Diamondback Energy Inc (NASDAQ:FANG) recently announced a dividend of $3.08 per share, payable on 2024-03-12, with the ex-dividend date set for 2024-03-04. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Diamondback Energy Inc's dividend performance and assess its sustainability.
What Does Diamondback Energy Inc Do?
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Diamondback Energy is an independent oil and gas producer in the United States. The company operates exclusively in the Permian Basin. At the end of 2022, the company reported net proven reserves of 2.2 billion barrels of oil equivalent. Net production averaged about 448,000 barrels per day in 2023, at a ratio of 59% oil, 21% natural gas liquids, and 20% natural gas.
A Glimpse at Diamondback Energy Inc's Dividend History
Diamondback Energy Inc has maintained a consistent dividend payment record since 2018. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Diamondback Energy Inc's Dividend Yield and Growth
As of today, Diamondback Energy Inc currently has a 12-month trailing dividend yield of 4.31% and a 12-month forward dividend yield of 4.38%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Diamondback Energy Inc's annual dividend growth rate was 74.60%. Extended to a five-year horizon, this rate increased to 93.80% per year. Based on Diamondback Energy Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Diamondback Energy Inc stock as of today is approximately 117.83%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-12-31, Diamondback Energy Inc's dividend payout ratio is 0.44.
Diamondback Energy Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Diamondback Energy Inc's profitability 8 out of 10 as of 2023-12-31, suggesting good profitability prospects. The company has reported net profit in 7 years out of past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Diamondback Energy Inc's growth rank of 8 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Diamondback Energy Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Diamondback Energy Inc's revenue has increased by approximately 37.70% per year on average, a rate that outperforms approximately 85.4% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Diamondback Energy Inc's earnings increased by approximately 88.50% per year on average, a rate that outperforms approximately 90.83% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 35.10%, which outperforms approximately 85.78% of global competitors, underscores a solid financial foundation that supports dividend reliability.
Concluding Thoughts on Diamondback Energy Inc's Dividend Prospects
In conclusion, Diamondback Energy Inc's upcoming dividend payment, along with its impressive dividend growth rate, sensible payout ratio, and strong profitability and growth metrics, paint a picture of a company that's well-positioned to continue rewarding shareholders. The robust financial health of Diamondback Energy Inc suggests that its dividend payments are sustainable, making it an attractive option for value investors focused on income-generating stocks. Will Diamondback Energy Inc maintain its momentum and continue to be a shining star in the dividend universe? Only time will tell, but the indicators are certainly promising.
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This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
