Hess Corp's Dividend Analysis
Exploring the Sustainability and Growth of Hess Corp's Dividend
Hess Corp(NYSE:HES) recently announced a dividend of $0.44 per share, payable on 2023-12-29, with the ex-dividend date set for 2023-12-15. 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 Hess Corp's dividend performance and assess its sustainability.
What Does Hess Corp Do?
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Hess is an independent oil and gas producer with key assets in the Bakken Shale, Guyana, the Gulf of Mexico, and Southeast Asia. At the end of 2022, the company reported net proved reserves of 1.3 billion barrels of oil equivalent. Net production averaged 344 thousand barrels of oil equivalent per day in 2022, at a ratio of 72% oil and natural gas liquids and 28% natural gas.
A Glimpse at Hess Corp's Dividend History
Hess Corp has maintained a consistent dividend payment record since 1987. Dividends are currently distributed on a quarterly basis. Hess Corp has increased its dividend each year since 2007. 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 16 years.
Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Hess Corp's Dividend Yield and Growth
As of today, Hess Corp currently has a 12-month trailing dividend yield of 1.25% and a 12-month forward dividend yield of 1.30%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Hess Corp's annual dividend growth rate was 14.50%. Extended to a five-year horizon, this rate decreased to 6.00% per year. And over the past decade, Hess Corp's annual dividends per share growth rate stands at 7.60%.
Based on Hess Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Hess Corp stock as of today is approximately 1.67%.
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, Hess Corp's dividend payout ratio is 0.35.
Hess Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Hess Corp's profitability 5 out of 10 as of 2023-09-30, suggesting fair profitability. The company has reported net profit in 4 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. Hess Corp's growth rank of 5 out of 10 suggests that the company has a fair growth outlook. Revenue is the lifeblood of any company, and Hess Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Hess Corp's revenue has increased by approximately 19.30% per year on average, a rate that outperforms approximately 67.75% of global competitors.
Engaging Conclusion: Dividends Amidst Growth and Stability
In consideration of Hess Corp's consistent dividend payments, robust dividend growth rate, prudent payout ratio, fair profitability, and promising growth metrics, the company presents an attractive case for dividend-seeking value investors. The question remains: Can Hess Corp continue to balance sustainable dividend growth with strategic investments for future expansion? As the energy sector evolves with market dynamics and technological advancements, Hess Corp's ability to adapt will be crucial for long-term shareholder returns. For investors looking to diversify their portfolio with dividend-yielding stocks, Hess Corp warrants a closer look.
GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
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.
