Dividend growth investors, your attention please! The latest entrant to our Best Dividend Growth Stocks model portfolio is a dynamic, large-cap player in the oil and gas industry.
Let’s dive into some highlights that made this stock a compelling choice.
A forward payout ratio of 27% not only indicates strong financial health of the company but also aligns with the industry average of 36%. This low payout ratio suggests ample room for future growth and dividend boosts.
This company boasts a 6-year streak of dividend increases, positioning it in the top 30% of dividend stocks. Furthermore, its impressive 3-year dividend per share compound annual growth rate (CAGR) of 33% ranks in the elite top 20% bracket of all dividend stocks.
It is important to note that despite the positive commodity pricing environment, exploration and production activities have slowed down as companies prioritize enhancing shareholder returns.
As a result, the company is anticipated to experience slower growth this fiscal year relative to the strong performance of the previous year. However, it has the opportunity to improve its profit margins by cutting costs, leveraging its access to premium drilling sites.
Accordingly, the company’s stock has underperformed, returning 4% year-to-date, which falls behind the S&P 500’s 15% and the industry’s 6% return.
Mark your calendars for a substantial and unchanged qualified payout of $0.825/shr, set to be dispersed on October 31 after going ex-dividend on October 16.
For a deep-dive analysis on this stock, showcasing its returns potential through dividend growth, dividend safety, and more, continue reading. While arriving at our recommendation, we’ve also factored in the growth drivers and financial results discussed by the company management during their Q2 2023 earnings call held on August 4, 2023.
Let’s explore why it has the potential to be the crown jewel of any dividend growth portfolio!
