Why did XEC’s revenues fall in 2015 and 2016?
Cimarex Energy’s (XEC) revenues fell 40.0% and 13.0% in 2015 and 2016, respectively. Its oil sales and gas sales drove the fall in both years.
XEC’s NGL Sales and Gas Gathering and Other segments recorded growth in 2016 after falling in 2015. Its Gas Marketing business fell in both years. The rate of the decrease in its revenues decelerated in 2016 as the industry recovered.
Why did XEC’s EPS fall in 2015 and 2016?
Cimarex Energy’s (XEC) costs and expenses rose 223.0% in 2015 before falling 64.0% in 2016. Significant impairment of its oil and gas properties was recorded in 2015 and 2016. As a result, its operating income fell 560.0% and 84.0% in 2015 and 2016, respectively.
The company’s operating income turned negative for both periods. Other expenses rose 418.0% and 23.0% in 2015 and 2016, respectively. XEC’s interest expenses increased in 2015 before decreasing in 2016, which was offset by other income.
These factors led to decreases of 548.0% and 82.0% in its earnings per share (or EPS) for 2015 and 2016, respectively. Although the company’s EPS for both years turned negative, the rate of decline in its EPS slowed in 2016.
How did XEC’s revenues and EPS recover in 9M17?
Cimarex Energy’s (XEC) revenues recorded 56.0% growth in 9M17. Every segment of the company drove this growth.
The company’s costs and expenses decreased 48.0% in the absence of impairment. As a result, XEC recorded positive operating income. Other expenses rose 53.0% due to a debt extinguishment charge.
These factors led to positive EPS in 9M17, which was a change from 9M16. XEC has been unable to generate positive free cash flow during the timeframe under discussion.
How has XEC’s dividend yield evolved over the years?
Cimarex Energy (XEC) has taken a 50.0% cut in its dividend per share for 2016, followed by the same dividend per share in 2017. Its stock price has fallen 7.0% on a year-to-date (or YTD) basis after rising 52.0% in 2016. This trend explains the downward slope of the company’s dividend yield curve.
Cimarex Energy Company has a dividend yield of 0.3%, *a PE ratio of x, and a year-to-date return of -7.5%. These metrics compare to a sector average dividend yield of 1.6% and a PE ratio of 34.0x.
Comparison with broad indexes
The S&P 500 (SPX-INDEX) (SPY) offers a dividend yield of 2.3%, a PE ratio of 22.7x, and a YTD return of 15.5%. The Dow Jones Industrial Average (DJIA-INDEX) (DIA) has a dividend yield of 2.3%, a PE ratio of 21.2x, and a YTD return of 18.7%. The NASDAQ Composite (COMP-INDEX) (ONEQ) has a PE ratio of 25.4x and a YTD return of 25.4%.
The ProShares S&P 500 Aristocrats ETF (NOBL) is a dividend ETF with 4.0% exposure to the energy sector. NOBL has a PE ratio of 21.0x and a dividend yield of 1.9%.
The PowerShares International Dividend Achievers ETF (PID) is a dividend ETF with 25.0% exposure to energy. It has a PE of 15.1x and a dividend yield of 3.6%.