Last Tuesday, the company posted stellar quarterly results, with another double-digit increase in production, that reaffirm its growth story. The company also increased its dividend by 34% following a 33% increase earlier in February. This shows the management’s confidence in the company’s future growth. So far, over the last 15 years, EOG increased its dividend at an average of 23% in each year.
EOG shares are up 29.3% this year, currently hovering near $108. The company’s shares could continue to go higher on the back of increasing production and potential for growth from outside its core positions at Eagle Ford in South Texas and Bakken formation in North Dakota.
That said, bargain hunters should wait for a sell-off before buying EOG stock. The company’s shares currently yield 0.62%, despite the big jump in dividends, considerably lower than the average yield of 1.7% in the industry, as per data compiled by Thomson Reuters. The company’s shares are also trading 24.5 times its trailing earnings for the past 12 months, twice as high as the industry’s average.
During its second quarter, EOG posted 7.1% increase in income from the same quarter last year to $706.3 million, thanks to increase higher production from Eagle Ford and Permian Basin shale formations in Texas. The company’s revenue from sale of hydrocarbons increased by 27.2% to $3.37 billion on the back of 17% increase in production to 591,000 barrels of oil equivalents per day.
Excluding the impact of one-off items, EOG earnings increased by 38% from the same quarter last year to $1.45 a share, better than analysts’ expectations of $1.37 a share, as per data compiled by Thomson Reuters.