EOG Resources Inc's Dividend Analysis
Assessing the Sustainability of EOG Resources Inc's Dividend
EOG Resources Inc (NYSE:EOG) recently announced a dividend of $0.91 per share, payable on 2024-01-31, with the ex-dividend date set for 2024-01-16. 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 EOG Resources Inc's dividend performance and assess its sustainability.
What Does EOG Resources Inc Do?
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EOG Resources is an oil and gas producer with acreage in several U.S. shale plays, including the Permian Basin, the Eagle Ford, and the Bakken. At the end of 2022, it reported net proved reserves of 4.2 billion barrels of oil equivalent. Net production averaged 908 thousand barrels of oil equivalent per day in 2022 at a ratio of 73% oil and natural gas liquids and 27% natural gas.
A Glimpse at EOG Resources Inc's Dividend History
EOG Resources Inc has maintained a consistent dividend payment record since 1990. Dividends are currently distributed on a quarterly basis.
EOG Resources Inc has increased its dividend each year since 2001. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 23 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down EOG Resources Inc's Dividend Yield and Growth
As of today, EOG Resources Inc currently has a 12-month trailing dividend yield of 2.87% and a 12-month forward dividend yield of 3.17%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, EOG Resources Inc's annual dividend growth rate was 43.50%. Extended to a five-year horizon, this rate decreased to 33.40% per year. And over the past decade, EOG Resources Inc's annual dividends per share growth rate stands at an impressive 20.90%.
Based on EOG Resources Inc's dividend yield and five-year growth rate, the 5-year yield on cost of EOG Resources Inc stock as of today is approximately 12.12%.
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 2023-09-30, EOG Resources Inc's dividend payout ratio is 0.24.
EOG Resources Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks EOG Resources Inc's profitability 8 out of 10 as of 2023-09-30, suggesting good profitability prospects. The company has reported net profit in 7 years out of the past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. EOG Resources 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 EOG Resources Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. EOG Resources Inc's revenue has increased by approximately 19.90% per year on average, a rate that outperforms approximately 68.96% 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, EOG Resources Inc's earnings increased by approximately 55.90% per year on average, a rate that outperforms approximately 78.69% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 16.70%, which outperforms approximately 61.15% of global competitors.
Next Steps
Considering EOG Resources Inc's consistent dividend payments, robust dividend growth rate, reasonable payout ratio, solid profitability, and promising growth metrics, the company's dividend profile appears sustainable. This analysis should reassure investors of EOG Resources Inc's ability to maintain its status as a reliable dividend payer. However, as with any investment, it's crucial to continue monitoring these financial metrics to ensure ongoing stability and growth. For those interested in expanding their portfolio with high-dividend yield stocks, GuruFocus Premium users can utilize the High Dividend Yield Screener for informed investment decisions.
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.
