Hess Corp's Dividend Analysis
Assessing the Upcoming Dividend Payout and Company Fundamentals
Hess Corp(NYSE:HES) recently announced a dividend of $0.44 per share, payable on 2024-03-28, with the ex-dividend date set for 2024-03-15. 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 Corps 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 17 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 1.16% and a 12-month forward dividend yield of 1.16%. This suggests an expectation of same dividend payments over the next 12 months.
Over the past three years, Hess Corp's annual dividend growth rate was 20.50%. Extended to a five-year horizon, this rate decreased to 12.20% per year. And over the past decade, Hess Corp's annual dividends per share growth rate stands at 5.80%.
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 2.06%.
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 2023-12-31, Hess Corp's dividend payout ratio is 0.35.