Understanding Chesapeake Energy Corp's Upcoming Dividend Payout
Chesapeake Energy Corp (CHK, Financial) recently announced a dividend of $0.58 per share, payable on 2024-03-26, with the ex-dividend date set for 2024-03-06. 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 Chesapeake Energy Corps dividend performance and assess its sustainability.
What Does Chesapeake Energy Corp Do?
Chesapeake Energy Corp is a US-based exploration and production company. It is engaged in the acquisition, exploration, and development of properties for the production of oil, natural gas, and natural gas liquids from underground reservoirs. Geographically, the company focuses on areas of Marcellus, Northern Appalachian Basin in Pennsylvania; Haynesville, Northwestern Louisiana (Gulf Coast); and Eagle Ford, South Texas.
A Glimpse at Chesapeake Energy Corp's Dividend History
Chesapeake Energy Corp has maintained a consistent dividend payment record since 2021. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Chesapeake Energy Corp's Dividend Yield and Growth
As of today, Chesapeake Energy Corp currently has a 12-month trailing dividend yield of 4.40% and a 12-month forward dividend yield of 3.51%. This suggests an expectation of decreased dividend payments over the next 12 months.
Based on Chesapeake Energy Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Chesapeake Energy Corp stock as of today is approximately 4.40%.
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, Chesapeake Energy Corp's dividend payout ratio is 0.36.
Chesapeake Energy Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Chesapeake Energy Corp's profitability 3 out of 10 as of 2023-12-31, suggesting the dividend may not be sustainable. The company has reported net profit in 4 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. Chesapeake Energy Corp's growth rank of 3 out of 10 suggests that the company has poor growth prospects and thus, the dividend may not be sustainable.
Revenue is the lifeblood of any company, and Chesapeake Energy Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Chesapeake Energy Corp's revenue has decreased by approximately 53.30% per year on average, a rate that underperforms approximately 97.78% of global competitors.
Next Steps for Investors
In conclusion, while Chesapeake Energy Corp's dividend payments, dividend growth rate, and payout ratio may be appealing, the company's profitability and growth metrics present concerns for long-term sustainability. Investors should consider these factors carefully when evaluating Chesapeake Energy Corp as a potential addition to their dividend income portfolios. As the energy sector faces both opportunities and challenges, keeping an eye on industry trends and Chesapeake Energy Corp's strategic responses will be key to understanding its future dividend prospects. 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.
