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The board of directors of Occidental Petroleum Corporation (OXY - Analyst Report) has approved an increase in its quarterly dividend by 18.5% to 64 cents per share from its earlier payment of 54 cents. As a result of this revision, the company’s annualized dividend will be $2.56 per share. This dividend is payable on Apr 15, 2013 to shareholders of record as of Mar 8, 2013.
The new annual dividend yield will be 2.94%. This is higher than the other players in the oil and gas sector, including Hess Corporation (HES - Analyst Report), Marathon Oil Corporation (MRO - Analyst Report) and Murphy Oil Corporation (MUR - Analyst Report) with yields of 0.59%, 1.92% and 2.07%, respectively.
Occidental Petroleum’s dividend-payment history affirms its commitment to maximize shareholder wealth. Previously, the company had increased its dividend in Feb 2012. Quarterly dividend payout climbed 17.4% to 54 cents per share from 46 cents per share. The company values its owners and has been trying to boost their income through dividend hikes and consistent payments. The company hiked its dividend rate for 12 times in that 11 year window with annualized compounded growth rate of 16%.
Occidental Petroleum’s fourth-quarter 2012 cash flow from operating activities was $11.3 billion and its cash balance was $1.6 billion as of Dec 31, 2012. We believe the strong liquidity position of the company will be sufficient to meet its anticipated cash requirements and drive growth along with enhancing shareholders’ value over the next couple of years.
In the current market condition, we expect Occidental Petroleum to continue benefiting from rising oil prices given its oil-heavy production and reserve base. In addition, the company continues to take several cost-cutting measures like production curtailment and planned shutdowns of a few plants, which may improve its upcoming operating and financial performance.
Los Angeles, California-based Occidental Petroleum along with its subsidiaries operates as an oil and gas exploration and production company. The company currently has a Zacks Rank #3 (Hold).
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