Independent oil exploration and production company Marathon Oil (MRO) is another name that increased its dividend payouts to shareholders at the end of last week. Marathon announced a 13.33% increase to its quarterly payout on Friday, bringing it to 17 cents per share. That's a 2.17% payout at current price levels.
With a market capitalization of $22 billion, Marathon pales in comparison to integrated supermajors, but it's not competing with behemoth firms for a share of the market. But while scale isn't a determining factor in the S&P business, cost is -- and Marathon's costs are middle of the road at best. Where the firm has the most upside is in its shale portfolio, which still has room for unproven reserves to beat analysts' expectations.Another big upside catalyst could come from natural gas prices, which have been under pressure for a while now. If MRO can reap more cash for the natural gas that comes out with the firm's oil, investors would be able to expect considerable margin expansion. In the mean time, depressed prices aren't hurting this stock's valuation. While MRO's independent energy exposure is attractive, there are higher-yield alternatives for exposure to this sector right now.
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