Continue to site >
Trending ETFs
Energy Substation

News

Leaner Structure Helps E&P Giant Strengthen Position on Best Dividend Stocks List

It’s no secret that oil prices are on the rise.

Thanks to a growing global economy, demand for a variety of energy commodities and petrochemicals is finally starting to surge. That’s been met with a lack of supply – thanks to OPEC and a hefty cut in shale drilling during the last few lean years. The combination has been wonderful and welcome news for the suffering energy sector as prices have jumped more than 15% since the start of the year.

For our Best Dividend Stocks List pick in the energy sector, the rise in crude oil prices has been even better than average.

During the recent lean years, our pick has followed a disciplined approach to cost cutting and focusing on the lower-cost domestic shale plays. Asset sales and excess cash flows went toward paying down debt and strengthening its position in key regions.

Those efforts have paid off in spades.

Our pick is now “lean and mean” and is much better off than it was before the recent oil price crash. And because of this, the rise in oil prices is only boosting its bottom lines further. In fact, the firm managed to grow its earnings 150% year-over-year for the latest quarter, going from losses to profits. All of this has helped on the cash flow front and our pick has managed to reinstate dividends once again.

With oil still gaining and our firm now able to profit even when prices are low, the stock represents a great opportunity in the sector.

To summarize, here are five reasons why you should own this stock:

  1. One of the largest independent E&P companies based on proven reserves and production of liquids and natural gas.
  2. Focus on dropping costs/CAPEX spending to reduce its overall margins and break-even per barrel costs.
  3. Direct play on the rising global economy and growing energy demand.
  4. Recently increased its dividend by 7.5% and conducted more than $3 billion in buybacks last year
  5. Healthy payout ratio of 26% and increasing yield of 1.58%.

Click here to see our rationale when we originally selected this stock.

Get Premium to keep reading
This is a premium article. Please sign up for Dividend.com Premium to access this article and other Premium content.
Learn more