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Murphy Oil (MUR) Rewards Shareholders With 10% Dividend Hike

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Murphy Oil Corporation (MUR - Free Report) announced that its board of directors approved a 10% increase in its quarterly cash dividend to 27.5 cents per share. The dividend is payable on Mar 1, 2023, to shareholders of record at the close of business on Feb 13, 2023.

The current dividend of 27.5 cents per share indicates a growth of 120% from 12.5 cents paid during the fourth quarter of 2021.

The increase of dividends results in an annualized dividend of $1.10 per share from $1.00. The current dividend yield is 2.43%, better than the Zacks S&P 500 composite's average of 1.55%.

Can Murphy Oil Sustain Dividend Hikes?

Murphy Oil possesses one of the best upstream portfolios among the domestic oil and natural gas integrated companies and independent E&P group. The company is maintaining a multi-basin portfolio, including onshore and offshore assets for additional risk reduction flexibility amid the fluctuating prices.

Along with domestic assets, MUR’s Canadian assets are also boosting production. Murphy Oil’s Tupper Montney asset in Canada is one of the leading low-cost operating assets in North America. It expects to deliver production at a CAGR of 7% during 2022-2024.

To counter the fluctuation in commodity prices and protect free cash flow, the company entered into hedges and fixed-price forward sales contracts through 2024. Strong free cash flow will help Murphy Oil’s management to continue its shareholder-friendly moves.

Cutting Debt

Murphy Oil, during 2022, achieved debt reduction goal of $650 million through senior notes redemptions, partial tender and open market transactions, which lowered its annual interest expenses. It reported a long-term debt of $1,822.5 million on Dec 31, 2022, compared with $2,465.4 million as of Dec 31, 2021.

Price Performance

In the past six months, Murphy Oil's shares have returned 36.6% compared with the industry’s average of 2.4%.

 

Zacks Investment Research
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Zacks Rank & Stocks to Consider

Murphy Oil currently has a Zacks Rank #3 (Hold).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better ranked stocks are:

Energy Transfer (ET - Free Report) currently sports a Zacks Rank #1. It delivered an average earnings surprise of 16.3% for the last four quarters, and its current dividend yield is 7.9%.

Vaalco Energy (EGY - Free Report) currently has a Zacks Rank #2 (Buy). It delivered an average earnings surprise of 61.8% for the last four quarters, and its current dividend yield is 2.6%.

Global Partners (GLP - Free Report) currently has a Zacks Rank #2. It delivered an average earnings surprise of 287.9% for the last four quarters, and its current dividend yield is 7%.

 

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