Discover the dividend history, yield, growth, and prospects of Ovintiv Inc (OVV, Financial)
Ovintiv Inc (OVV) recently announced a dividend of $0.3 per share, payable on 2023-09-29, with the ex-dividend date set for 2023-09-14. 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 deep dive into Ovintiv Inc's dividend performance and assess its sustainability.
What Does Ovintiv Inc Do?
Ovintiv is an independent oil and gas producer with key assets in the Permian, Eagle Ford, Montney, and Duvernay areas. At the end of 2019, the company reported net proven reserves of 1,348 million barrels of oil equivalent. Net production averaged 543 thousand barrels of oil equivalent per day in 2020 at a ratio of 53% oil and natural gas liquids and 47% natural gas.
A Glimpse at Ovintiv Inc's Dividend History
Ovintiv Inc has maintained a consistent dividend payment record since 2001. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Ovintiv Inc's Dividend Yield and Growth
As of today, Ovintiv Inc currently has a 12-month trailing dividend yield of 2.15% and a 12-month forward dividend yield of 2.46%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Ovintiv Inc's annual dividend growth rate was 36.30%. Extended to a five-year horizon, this rate decreased to 22.50% per year. And over the past decade, Ovintiv Inc's annual dividends per share growth rate stands at -17.90%.
Based on Ovintiv Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Ovintiv Inc stock as of today is approximately 5.93%.
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, Ovintiv Inc's dividend payout ratio is 0.08.
Ovintiv Inc's profitability rank offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Ovintiv Inc's profitability 7 out of 10 as of 2023-06-30, suggesting good profitability prospects. The company has reported net profit in 7 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. Ovintiv Inc's growth rank of 7 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Ovintiv Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Ovintiv Inc's revenue has increased by approximately 23.30% per year on average, a rate that outperforms approximately 75.96% 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, Ovintiv Inc's earnings increased by approximately 150.10% per year on average, a rate that outperforms approximately 95.52% of global competitors.
Next Steps
With a consistent dividend payment record, robust growth metrics, and a promising profitability rank, Ovintiv Inc presents a compelling case for dividend-focused investors. The company's low payout ratio and strong growth prospects further reinforce the sustainability of its dividend payments. However, investors should continue to monitor Ovintiv Inc's performance to ensure the company can maintain its dividend growth rate and profitability in the long run.
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