How Occidental Petroleum Is Returning Money to Shareholders
On July 13, 2017, Occidental Petroleum (OXY) announced that it has increased its quarterly dividend by ~1.3% from $0.76 per share to $0.77 per share. The increased dividend will be payable on October 16, 2017, to stockholders of record on September 11, 2017, as the dividend payment for 3Q17.
Commenting on the dividend increase, Occidental Petroleum President and CEO (chief executive officer) Vicki Hollub stated: “Occidental has now increased its dividend every year for 15 consecutive years. The total increase in the annual dividend rate from 2002 exceeds 500 percent.”
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Dividend and dividend yield
OXY paid its most recent dividend on July 14, 2017, of $0.76 per share on its common stock. This was the dividend payment for 2Q17. In the trailing-12-month period, OXY has paid a total dividend of $3.04 per share on its common stock.
As of August 18, 2017, the company’s dividend yield, which refers to the trailing-12-month dividend divided by the stock’s price, stood at just over 5.1%.
In the past three years, OXY’s dividend payment has risen from $0.72 per share in 2Q14 to $0.76 per share in 2Q17. OXY’s dividend yield has risen since 3Q16, mainly due to the decline in the stock’s price.
OXY’s stock price is now in a downtrend, and when the stock price falls, its dividend yield increases. According to Occidental Petroleum’s press release in July 2016, “Occidental has paid quarterly dividends continuously since 1975.”
Other upstream players
Due to the steep downtrend in energy prices, many upstream companies have cut back on their dividends. In 2016, Denbury Resources (DNR) and Energen (EGN) announced that they had discontinued their cash dividends on their common stock due to the significant decline in energy prices.
ConocoPhillips (COP), however, paid a dividend of ~$0.27 per share on June 1, 2017.
Notably, the SPDR S&P Oil and Gas Exploration & Production ETF (XOP) generally invests 80% of its total assets in oil and gas exploration companies, while the First Trust Natural Gas ETF (FCG) invests in natural gas producers.