Assessing the Sustainability of Pioneer Natural Resources Co's Dividend
Pioneer Natural Resources Co (PXD, Financial) recently announced a dividend of $3.2 per share, payable on 2023-12-22, with the ex-dividend date set for 2023-11-29. 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 Pioneer Natural Resources Co's dividend performance and assess its sustainability.
What Does Pioneer Natural Resources Co Do?
Headquartered in Irving, Texas, Pioneer Natural Resources is an independent oil and gas exploration and production company focusing on the Permian Basin in Texas. At year-end 2022, Pioneer's proven reserves were 2.4 billion barrels of oil equivalent with net production for the year of 650 mboe per day. Oil and natural gas liquids represented 79% of production.
A Glimpse at Pioneer Natural Resources Co's Dividend History
Pioneer Natural Resources Co has maintained a consistent dividend payment record since 2004. Dividends are currently distributed on a quarterly basis.
Pioneer Natural Resources Co has increased its dividend each year since 2009. 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 14 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Pioneer Natural Resources Co's Dividend Yield and Growth
As of today, Pioneer Natural Resources Co currently has a 12-month trailing dividend yield of 6.92% and a 12-month forward dividend yield of 5.90%. This suggests an expectation of decreased dividend payments over the next 12 months.
Over the past three years, Pioneer Natural Resources Co's annual dividend growth rate was 176.80%. Extended to a five-year horizon, this rate decreased to 174.40% per year. And over the past decade, Pioneer Natural Resources Co's annual dividends per share growth rate stands at an impressive 71.00%.
Based on Pioneer Natural Resources Co's dividend yield and five-year growth rate, the 5-year yield on cost of Pioneer Natural Resources Co stock as of today is approximately 1,076.53%.
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, Pioneer Natural Resources Co's dividend payout ratio is 0.79, which may suggest that the company's dividend may not be sustainable.
Pioneer Natural Resources Co's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Pioneer Natural Resources Co's profitability 8 out of 10 as of 2023-09-30, suggesting good profitability prospects. 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. Pioneer Natural Resources Co's growth rank of 8 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Pioneer Natural Resources Co's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Pioneer Natural Resources Co's revenue has increased by approximately 18.70% per year on average, a rate that outperforms approximately 65.93% 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, Pioneer Natural Resources Co's earnings increased by approximately 59.90% per year on average, a rate that outperforms approximately 80.16% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 33.30%, which outperforms approximately 85% of global competitors, further solidifies its financial strength.
Next Steps
In conclusion, Pioneer Natural Resources Co's robust dividend history, substantial growth in dividends per share, and a strong yield on cost reflect its commitment to shareholder returns. However, the near-term expectation of a dividend decrease and the current payout ratio may warrant caution. The company's solid profitability and impressive growth metrics suggest that it could continue to sustain its dividends, but investors should keep an eye on these factors. Considering Pioneer Natural Resources Co's financial health and market position, value investors may find it a compelling candidate for their portfolios, especially those seeking income through dividends.
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.
Also check out: (Free Trial)
