If you are looking for dividend stocks, you'll probably be interested in Pioneer Natural Resources' (NYSE: PXD) 10.6% yield. Before you jump on that, however, you'll want to understand a lot more about how the dividend that backs the yield is determined. In fact, you might be better off owning Enterprise Products Partners (NYSE: EPD) or Magellan Midstream Partners (NYSE: MMP) despite their lower, though still incredibly generous, 7.6% and 7.9% yields, respectively.

Pioneer Natural Resources is a respected company in the energy patch. From a big-picture perspective, it is a U.S.-based oil and natural gas producer currently benefiting from strong energy prices. Notably, third-quarter 2022 earnings were boosted by higher selling prices for oil and natural gas on a year-over-year basis. This is why the company declared a dividend of $5.71 per share, to be paid in the fourth quarter of the year. That payment was up from the $3.64 per share it paid in the same period of 2021.

So far this story sounds wonderful, that is until you compare the company's third-quarter 2022 performance to the second quarter. When you do that, you see that realized prices were lower for two of its three main products and that the dividend payment was cut by 33% sequentially. The problem here is that energy prices are highly variable, so the company has moved toward paying a smaller core dividend with a variable dividend on top of it. In fact, the variable component accounted for around 60% of the cash returned to investors in the third quarter (the core dividend was 15% and share repurchases were 25%).

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Source Fool.com