Marathon Oil Corp's Dividend Analysis
Dissecting Marathon Oil Corp's Dividend Sustainability and Growth
Marathon Oil Corp(NYSE:MRO) recently announced a dividend of $0.11 per share, payable on 2024-03-11, with the ex-dividend date set for 2024-02-20. 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 Marathon Oil Corps dividend performance and assess its sustainability.
What Does Marathon Oil Corp Do?
This Powerful Chart Made Peter Lynch 29% A Year For 13 Years
How to calculate the intrinsic value of a stock?
Marathon Oil Corp is an independent exploration and production company primarily focusing on unconventional resources in the United States. At the end of 2022, the company reported net proved reserves of 1.3 billion barrels of oil equivalent. Net production averaged 343 thousand barrels of oil equivalent per day in 2022 at a ratio of 70% oil and NGLs and 30% natural gas.
A Glimpse at Marathon Oil Corp's Dividend History
Marathon Oil Corp has maintained a consistent dividend payment record since 1991. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Marathon Oil Corp's Dividend Yield and Growth
As of today, Marathon Oil Corp currently has a 12-month trailing dividend yield of 1.75% and a 12-month forward dividend yield of 1.88%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Marathon Oil Corp's annual dividend growth rate was 17.00%. Extended to a five-year horizon, this rate decreased to 3.20% per year. And over the past decade, Marathon Oil Corp's annual dividends per share growth rate stands at -15.60%.
Based on Marathon Oil Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Marathon Oil Corp stock as of today is approximately 2.05%.
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, Marathon Oil Corp's dividend payout ratio is 0.14.
Marathon Oil Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Marathon Oil Corp's profitability 6 out of 10 as of 2023-09-30, suggesting fair profitability. The company has reported net profit in 6 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. Marathon Oil Corp's growth rank of 6 out of 10 suggests that the company has a fair growth outlook. Revenue is the lifeblood of any company, and Marathon Oil Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Marathon Oil Corp's revenue has increased by approximately 20.60% per year on average, a rate that outperforms approximately 69.64% 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, Marathon Oil Corp's earnings increased by approximately 105.20% per year on average, a rate that outperforms approximately 93.16% of global competitors.
Next Steps in Dividend Investment
Investors seeking to capitalize on Marathon Oil Corp's dividend payments should consider the company's consistent dividend history, its recent yield increase, and the robust growth metrics that support dividend sustainability. The low payout ratio coupled with fair profitability and growth ranks indicate that Marathon Oil Corp is in a position to continue rewarding shareholders while investing in future growth. As value investors analyze these factors, they may find Marathon Oil Corp an attractive addition to a dividend-focused portfolio. 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.
