Unraveling the Dividend Dynamics of Horizon Oil Ltd
Horizon Oil Ltd(HZNFF, Financial) recently announced a dividend of $0.02 per share, payable on 2023-10-25, with the ex-dividend date set for 2023-10-17. 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 delve into Horizon Oil Ltd's dividend performance and assess its sustainability.
What Does Horizon Oil Ltd Do?
Horizon Oil Ltd is engaged in petroleum exploration, development, and production. The company's exploration, development, and production activities are focused on Southeast Asia. The operating segments of the group are New Zealand exploration and development, China exploration and development, and All other segments. It generates the prime revenue from New Zealand's exploration and development segment in which the group is involved in the development and production of crude oil and oil field development and in the exploration and evaluation of hydrocarbons. The operations of the organization are carried out in China and New Zealand.
A Glimpse at Horizon Oil Ltd's Dividend History
Horizon Oil Ltd has maintained a consistent dividend payment record since 2021. Dividends are currently distributed on a bi-annually basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Horizon Oil Ltd's Dividend Yield and Growth
As of today, Horizon Oil Ltd currently has a 12-month trailing dividend yield of 8.77% and a 12-month forward dividend yield of 20.02%. This suggests an expectation of increased dividend payments over the next 12 months.
Horizon Oil Ltd's dividend yield of 8.77% is near a 10-year low and underperforms than 18.89 of global competitors in the Oil & Gas industry, suggesting that the company's dividend yield may not be a compelling proposition for income investors.
Based on Horizon Oil Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of Horizon Oil Ltd stock as of today is approximately 8.77%.
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, Horizon Oil Ltd's dividend payout ratio is 1.09. This may suggest that the company's dividend may not be sustainable.
Horizon Oil Ltd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Horizon Oil Ltd's profitability 6 out of 10 as of 2023-06-30, suggesting fair profitability. 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. Horizon Oil Ltd's growth rank of 6 out of 10 suggests that the company has a fair growth outlook.
Revenue is the lifeblood of any company, and Horizon Oil Ltd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Horizon Oil Ltd's revenue has increased by approximately 17.90% per year on average, a rate that outperforms approximately 64.34% of global competitors.
Next Steps
Given Horizon Oil Ltd's consistent dividend payments, promising growth rate, and reasonable payout ratio, it appears to be a viable choice for investors seeking steady income. However, its profitability and the sustainability of its dividends warrant further investigation. Ultimately, the decision to invest should be based on comprehensive research and analysis. 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.
