EOG Resources (NYSE:EOG) Has Announced A Dividend Of $0.91

EOG Resources, Inc.'s (NYSE:EOG) investors are due to receive a payment of $0.91 per share on 31st of January. This makes the dividend yield about the same as the industry average at 5.1%.

See our latest analysis for EOG Resources

EOG Resources' Dividend Is Well Covered By Earnings

We aren't too impressed by dividend yields unless they can be sustained over time. Before making this announcement, EOG Resources was easily earning enough to cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.

Over the next year, EPS is forecast to fall by 14.4%. If the dividend continues along the path it has been on recently, we estimate the payout ratio could be 61%, which is comfortable for the company to continue in the future.

EOG Resources Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2014, the annual payment back then was $0.375, compared to the most recent full-year payment of $6.14. This works out to be a compound annual growth rate (CAGR) of approximately 32% a year over that time. We can see that payments have shown some very nice upward momentum without faltering, which provides some reassurance that future payments will also be reliable.

EOG Resources Could Grow Its Dividend

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. It's encouraging to see that EOG Resources has been growing its earnings per share at 9.5% a year over the past five years. A low payout ratio and decent growth suggests that the company is reinvesting well, and it also has plenty of room to increase the dividend over time.

EOG Resources Looks Like A Great Dividend Stock

Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. The company is generating plenty of cash, and the earnings also quite easily cover the distributions. However, it is worth noting that the earnings are expected to fall over the next year, which may not change the long term outlook, but could affect the dividend payment in the next 12 months. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. However, there are other things to consider for investors when analysing stock performance. Taking the debate a bit further, we've identified 1 warning sign for EOG Resources that investors need to be conscious of moving forward. Is EOG Resources not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.