An In-depth Look at the Dividend Performance and Sustainability of EOG Resources Inc
EOG Resources Inc (EOG, Financial) recently announced a dividend of $0.83 per share, payable on 2023-10-31, with the ex-dividend date set for 2023-10-16. As investors eagerly anticipate this upcoming payment, it's crucial to assess EOG Resources Inc's dividend history, yield, and growth rates. This article, using GuruFocus data, provides an in-depth analysis of EOG Resources Inc's dividend performance and its sustainability.
What Does EOG Resources Inc Do?
EOG Resources Inc is a prominent oil and gas producer with vast acreage in several U.S. shale plays, including the Permian Basin, the Eagle Ford, and the Bakken. At the end of 2022, the company reported net proved reserves of 4.2 billion barrels of oil equivalent. In 2022, net production averaged 908 thousand barrels of oil equivalent per day, with a 73% oil and natural gas liquids and 27% natural gas ratio.
A Glimpse at EOG Resources Inc's Dividend History
Since 1990, EOG Resources Inc has maintained a consistent dividend payment record, with dividends currently distributed on a quarterly basis. The company has increased its dividend annually since 2001, earning it the status of a dividend achiever. This honor is bestowed on companies that have consistently increased their dividend for at least the past 22 years.
Below is a chart showing the annual Dividends Per Share for tracking historical trends.
Breaking Down EOG Resources Inc's Dividend Yield and Growth
As of today, EOG Resources Inc has a 12-month trailing dividend yield of 2.41% and a 12-month forward dividend yield of 2.47%. 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. However, 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 10.18%.
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 2023-06-30, EOG Resources Inc's dividend payout ratio is 0.21.
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 2023-06-30, suggesting good profitability prospects. The company has reported net profit in 7 years out of past 10 years.
Growth Metrics: The Future Outlook
EOG Resources Inc's growth rank of 8 out of 10 suggests that the company's growth trajectory is good relative to its 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 41.10% per year on average, a rate that outperforms than approximately 68.83% of global competitors.
Conclusion
Given EOG Resources Inc's consistent dividend payments, impressive dividend growth rate, low payout ratio, high profitability, and robust growth metrics, it stands as a compelling dividend stock. However, as with any investment, potential investors should conduct their due diligence before making a decision. 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.
