Equinor ASA's Dividend Analysis
Assessing the Sustainability and Growth of Equinor ASA's Dividends
Equinor ASA (NYSE:EQNR) recently announced a dividend of $0.6 per share, payable on 2024-02-27, with the ex-dividend date set for 2024-02-14. 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 Equinor ASA's dividend performance and assess its sustainability.
What Does Equinor ASA Do?
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Equinor is a Norway-based integrated oil and gas company. It has been publicly listed since 2001, but the government retains a 67% stake. Operating primarily on the Norwegian Continental Shelf, the firm produced 2.0 million barrels of oil equivalent per day in 2022 (50% liquids) and ended the year with 5.2 billion barrels of proven reserves (49% liquidsl). Operations also include offshore wind, solar, oil refineries and natural gas processing, marketing, and trading.
A Glimpse at Equinor ASA's Dividend History
Equinor ASA has maintained a consistent dividend payment record since 2002. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Equinor ASA's Dividend Yield and Growth
As of today, Equinor ASA currently has a 12-month trailing dividend yield of 4.17% and a 12-month forward dividend yield of 4.54%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Equinor ASA's annual dividend growth rate was 23.20%. Extended to a five-year horizon, this rate decreased to 3.80% per year. And over the past decade, Equinor ASA's annual dividends per share growth rate stands at -0.10%.
Based on Equinor ASA's dividend yield and five-year growth rate, the 5-year yield on cost of Equinor ASA stock as of today is approximately 5.02%.
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, Equinor ASA's dividend payout ratio is 0.31.
Equinor ASA's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Equinor ASA's profitability 7 out of 10 as of 2023-12-31, 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. Equinor ASA's growth rank of 7 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Equinor ASA's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Equinor ASA's revenue has increased by approximately 45.20% per year on average, a rate that outperforms approximately 91.09% of global competitors.
Concluding Insights on Equinor ASA's Dividends
In conclusion, Equinor ASA's consistent dividend payments and its ability to sustain and grow these dividends are supported by a reasonable payout ratio, strong profitability, and solid growth metrics. While past performance is not always indicative of future results, these factors provide a measure of confidence in the company's commitment to shareholder returns. Investors seeking to diversify their income-generating portfolio might consider the stability and potential of Equinor ASA's dividends. Could Equinor ASA be the next addition to your dividend stock portfolio?
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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.
