EOG Resources Today
EOG Resources
(As of 12/13/2024 8:58 PM ET)
- 52 week range
- US$108.94
▼
$139.67
- Dividend yield
- 2.87%
- P/E ratio
- 10.21
- Target price
- $144.20
EOG Resources New York Stock Exchange: EOG is a small, diversified energy play and cash flow fountain that is on track to hit new all-time highs in 2025. Despite numerous headwinds, the company is increasing production, improving operational excellence, maintaining strong cash flow and free cash flow growth, and delivering strong returns to investors. The fourth-quarter outlook included expectations for additional quality improvement, return on equity prospects and other catalysts that will drive share price growth in 2025. Analysts forecast the business will return to growth in 2025, and their estimates for the stock price are rising after bottoming out earlier in the year.
EOG Resources: Increases return on capital through dividends and buybacks
EOG Resources’ return of capital includes dividends and share repurchases. The latest updates are a 7% distribution increase and a $5 billion premium to repurchase authorization, representing nearly 7% of the market cap with shares around $125.
EOG Resources Dividend Payments
- Dividend yield
- 2.87%
- Annual dividends
- $3.64
- Annual dividend growth for 3 years
- 32.69%
- Dividend payout ratio
- 29.31%
- Next dividend payment
- January 31
EOG Dividend History
Return on equity in the third quarter was in line with the target of 85% of free cash flow, which is stable and is expected to remain so in the fourth quarter and into 2025. Despite the decline in revenue, the company’s free cash flow remained flat year-over-year in the third quarter, resulting in a free cash flow margin of 25% and a strong balance sheet. Dividends are annualized at $3.90, or about 3%, and buybacks have cut the quarterly average by more than 2%.
The only warning sign is the company’s decision to increase its debt. However, a company’s balance sheet is a fortress; The increase in debt is consistent with trends and historical debt loads and will increase available cash, ensuring the rate of return on capital is maintained. At the end of the third quarter, balance sheet highlights include a net cash position and ultra-low leverage of approximately 0.15x equity and less than 0.3x equity adjusted for expected growth, leaving the company in healthy financial condition.
EOG Resources Increased Cash Flow and Free Cash Flow in Q3: Analysts Raise Price Target
EOG Resources had a decent third quarter despite a 1% decline in revenue. The company is increasing production to offset lower selling prices and is compounding production gains by improving margins to boost profits. Other details include increased cash from operations, reduced expenses, reduced debt, and increased cash and cash equivalents. The final results included a year-over-year contraction, but the $2.89 figure was $0.12, or 430 basis points, better than expected. The forecast also came in above consensus, with higher volumes, volume growth and lower costs than the previous forecast.
Analyst reactions to the news have been mixed, including one rating affirmation and one downgrade, but the balance sheet is bullish for the market. The re-rating includes an above-consensus price target, the downgrade includes an upgrade to above-consensus price target, and all four upgrade targets indicate consensus or outperform for the stock over the next 12 months. This is important as the consensus is 13% higher than the price action in early December and is a new all-time high when reached.
Institutions limited EOG resource growth in the fourth quarter
A risk to stock price forecasts is institutional activity. While institutional activity was generally bullish during the first three quarters of the year, it turned bearish in the fourth quarter and capped stock prices. EOG is moving sideways within the trading range and may not be able to move above it given this factor since the group owns about 90% of the shares. However, rising support in this range suggests the market is preparing for the next move, which is likely to be higher.
Critical support for EOG stock lies near the 150-day EMA. He and the long-term-oriented buyers he represents have supported the stock price since 2021 and are unlikely to change. The likely scenario is that this market will retest support at this level, leading to another bounce. The question is whether the rebound will gain momentum and bring the stock price back to the top of the range or above, or whether the market will continue to move sideways within its range. If institutions return to balance sheet buying, a move to new highs is likely. Critical resistance targets are located near $140 and $149.
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