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APA Ups Shareholder Returns: Hikes Dividend, Expands Buyback

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APA Corporation (APA - Free Report) recently got approval from the board of directors to increase the quarterly dividend by 12.5 cents to 25 cents per share. The new payout will be on Nov 22 to its common shareholders of record on Oct 21. Following the 100% hike this quarter, APA’s annual dividend of $1 per share yields 2.41%, which is better than the S&P 500’s 1.54%.

The macro environment for U.S. Exploration & Production operators like APA remains robust, thanks to high commodity prices and improved fundamentals that should aid long-term growth. This positive backdrop, together with APA’s significant debt profile improvement and healthy cash flows, allows the company to reward investors with a dividend hike on Wednesday.

APA management sees the dividend hike as part of its commitment to return a minimum of 60% of free cash flow to shareholders each year. However, stock buyback continues to be the company’s preferred tool to distribute cash, with APA adding another 40 million shares to its buyback authorization.

Founded in 1954, Houston, TX-based APA Corporation is one of the world's leading independent energy companies engaged in the exploration, development and production of natural gas, crude oil and natural gas liquids. Geographically, the company’s operations are in the United States, Egypt and in the North Sea of the United Kingdom. APA also holds acreage in offshore Suriname (South America) and other international locations.

Zacks Rank & Energy Picks

APA currently carries a Zacks Rank #3 (Hold).

Some better-ranked players in the Oil/Gas sector are Murphy USA (MUSA - Free Report) , PBF Energy (PBF - Free Report) and Earthstone Energy (ESTE - Free Report) , each carrying a Zacks Rank #1 (Strong Buy) currently.

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

Murphy USA: Murphy USA is valued at some $6.6 billion. The Zacks Consensus Estimate for MUSA’s 2022 earnings has been revised 40.7% upward over the past 60 days.

Murphy USA, headquartered in El Dorado, AR, delivered a 40.8% beat in Q2. MUSA shares have surged 89.6% in a year.

Earthstone Energy: ESTE beat the Zacks Consensus Estimate for earnings in each of the last four quarters. The company has a trailing four-quarter earnings surprise of roughly 27%, on average.

Earthstone Energy is valued at around $2.3 billion. ESTE has seen its shares gain 73.2% in a year.

PBF Energy: PBF Energy is valued at some $3.7 billion. The Zacks Consensus Estimate for PBF’s 2022 earnings has been revised 51.6% upward over the past 60 days.

PBF Energy, headquartered in Parsippany, NJ, has a trailing four-quarter earnings surprise of roughly 78%, on average. PBF shares have surged 233.8% in a year.

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