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Hess (HES) Rewards Investors With Dividend Hike, Updates View

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Hess Corporation (HES - Free Report) recently announced approvals from the board of directors to raise quarterly dividend. 

The new dividend of 37.5 cents per share represents a hike of 50% from the prior divided of 25 cents per share. Hess said that the dividend will be payable on Mar 30, to stockholders of record as of the close of business on Mar 14. Along with the dividend hike, the upstream energy player declared the repayment of the remaining $500 million of a $1-billion term loan that is scheduled to mature in March 2023.

With the overall businesses generating handsome free cashflow, Hess is planning to continue to reward shareholders with dividend hikes and stock buybacks. HES emphasized that backed by the startup of the Liza Phase 2 oil development, located off the coast of Guyana, the company has strengthened its position financially to start increasing shareholders’ returns and lower debt load.

Hess announced that for 2022, it is expecting company-wide production in the range of 325,000 to 330,000 barrels of oil equivalent per day, excluding Libya. This represents a downward revision from the prior guidance of 330,000 to 340,000 barrels of oil equivalent per day. The downward revision is primarily owing to reduced Bakken production.

For the March quarter, Hess expects its company-wide net production in the band of 270,000 to 275,000 barrels of oil equivalent per day excluding Libya. This also represents a downward revision from the prior guidance of 275,000 to 285,000 barrels of oil equivalent per day owing to reduced Bakken production.

Hess currently carries a Zacks Rank #3 (Hold). Better-ranked players in the energy space include Exxon Mobil Corporation (XOM - Free Report) , ConocoPhillips (COP - Free Report) and Chevron Corporation (CVX - Free Report) . While ExxonMobil and ConocoPhillips sport a Zacks Rank #1 (Strong Buy), Chevron carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

ExxonMobil is banking on its key upstream projects centered around Permian – the most prolific basing in the United States – and offshore Guyana resources.

ExxonMobil reported strong fourth-quarter results, thanks to improved realized oil and natural gas prices as well as higher refining and chemical margins. In the past seven days, ExxonMobil has witnessed upward earnings estimate revisions for 2022.

Considering production and proved reserves, ConocoPhillips is one of the leading upstream energy players. In the past 30 days, ConocoPhillips has witnessed upward earnings estimate revisions in the past 30 days.

ConocoPhillips’ estimate for earnings for 2022 is pegged at $9.74 per share, suggesting a year-over-year increase of 62.1%.

In the Permian basin, Chevron has a strong footprint. The majority of Chevron’s assets in the most prolific basin of the United States have minimal royal payments, thereby securing handsome cashflows in the long run.

In the past 30 days, Chevron has witnessed upward earnings estimate revisions for 2022.