3 Reasons This Oil Stock Surged 42.7% in the First Half of 2021
Shares of Pioneer Natural Resources (NYSE: PXD) rocketed 42.7% in the first half of 2021, according to data provided by S&P Global Market Intelligence. Rallying oil prices, a mega acquisition, and a new dividend policy that will mean more money in the hands of shareholders as oil prices rise drove Pioneer shares higher.
After increasing its dividend in early February for the fourth consecutive year, Pioneer launched a new variable dividend policy later in the month under which it plans to distribute up to 75% of its previous year's free cash flow (FCF) in dividends every year, over and above its base dividend. Pioneer will pay out dividends under the new policy from next year onward, and it expects to pay up to 50% of 2021 FCF next year.
But here's where things get interesting. Pioneer projected 50% FCF payout in 2022 assuming average WTI oil price of $42 per barrel. With the price of oil hovering around $70 per barrel as of this writing, shareholders can expect an even bigger windfall.
Source Fool.com
