Occidental Petroleum Corporation (OXY) said that its board has approved a 21% increase in the annual dividend rate. This increase brings Occidental’s annualized dividend rate to $1.84 per share from the previous rate of $1.52.
As part of the annual dividend rise, Occidental said it will now pay a quarterly dividend of 46 cents per share. The company also confirmed that the first increased quarterly dividend will be paid on April 15, 2011, to shareholders of record as of March 10, 2011.
Occidental’s new annualized dividend rate reflects a current yield of 1.86%. This compares to the current dividend yield of its closest peer ConocoPhillips (COP) which stands higher at 3.14%.
This dividend increase underscores Occidental’s sound financial and operational performance, and management’s increasing confidence to improve returns. The company’s long-term strategy continues to target enhancement of stockholder value with notable dividend expansion along with production growth and good returns on invested capital.
A strong balance sheet, capital discipline and high operating efficiency have always been the cornerstones of Occidental’s competitive advantage. As of December 31, 2010, the company had strong liquidity and a debt-to-cap ratio of 14%. The company ended full-year 2010 with operating cash flows of $9.3 billion, reflecting a 60% increase from 2009.
Occidental has been constantly raising its dividend rate every year since 2002. The company’s most recent dividend increase marks a 268% hike between now and 2002, bringing the company’s compound annual dividend growth rate to 15.6% for the period. Occidental’s consistent hike in dividend bespeaks the company’s commitment to provide increasing returns to shareholders, leveraging its profitable assets.
Based in Los Angeles, California, Occidental Petroleum along with its subsidiaries operates as an oil and gas exploration and production company. Occidental has operations in the United States, Middle East/North Africa and Latin America.
Occidental Petroleum currently has a Zacks #3 Rank (short-term Hold rating). We also maintain a long-term Neutral rating on the stock.
CONOCOPHILLIPS (COP): Free Stock Analysis Report
OCCIDENTAL PET (OXY): Free Stock Analysis Report
Zacks Investment Research
