Assessing the Sustainability and Growth of Coterra Energy Inc's Dividends
Coterra Energy Inc (CTRA, Financial) recently announced a dividend of $0.2 per share, payable on 2023-11-30, with the ex-dividend date set for 2023-11-15. 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 Coterra Energy Inc's dividend performance and assess its sustainability.
What Does Coterra Energy Inc Do?
Coterra Energy Inc is an independent exploration and production company with operations in Appalachia, the Permian Basin, and Oklahoma. It was formed after the 2021 merger with Cabot and Cimarex. At year-end 2022, Coterra's proved reserves were 2.4 billion barrels of oil equivalent, with net production that year of approximately 633 million barrels of oil equivalent per day (of which 74% was natural gas).
A Glimpse at Coterra Energy Inc's Dividend History
Coterra Energy Inc has maintained a consistent dividend payment record since 1990. Dividends are currently distributed on a quarterly basis. Coterra Energy Inc has increased its dividend each year since 1997. The stock is thus listed as a dividend aristocrat, an honor that is given to companies that have increased their dividend each year for at least the past 26 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Coterra Energy Inc's Dividend Yield and Growth
As of today, Coterra Energy Inc currently has a 12-month trailing dividend yield of 6.07% and a 12-month forward dividend yield of 2.99%. This suggests an expectation of decreased dividend payments over the next 12 months.
Over the past three years, Coterra Energy Inc's annual dividend growth rate was 92.30%. Extended to a five-year horizon, this rate decreased to 59.20% per year. And over the past decade, Coterra Energy Inc's annual dividends per share growth rate stands at an impressive 44.30%.
Based on Coterra Energy Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Coterra Energy Inc stock as of today is approximately 62.07%.
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, Coterra Energy Inc's dividend payout ratio is 0.57.
Coterra Energy Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Coterra Energy Inc's profitability 8 out of 10 as of 2023-09-30, suggesting good profitability prospects. The company has reported net profit in 8 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. Coterra Energy Inc'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 Coterra Energy Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Coterra Energy Inc's revenue has increased by approximately 31.80% per year on average, a rate that outperforms approximately 83.74% 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, Coterra Energy Inc's earnings increased by approximately 46.40% per year on average, a rate that outperforms approximately 72.92% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 32.10%, which outperforms approximately 83.45% of global competitors.
Engaging Conclusion: Coterra Energy Inc's Dividend Outlook
Considering Coterra Energy Inc's consistent history of dividend payments, impressive growth in dividends per share, and a strong payout ratio, the company presents itself as a potentially attractive opportunity for value investors focused on dividend income. The robust profitability rank and growth metrics further reinforce the belief in the company's ability to sustain and potentially increase its dividends. As Coterra Energy Inc navigates through market dynamics, will its strategic initiatives and operational efficiency continue to support its dividend aristocrat status? For investors seeking to diversify their portfolio with dividend-yielding stocks, Coterra Energy Inc warrants attention. 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.
