This Energy Stock Just Boosted Its Dividend by 20%. Are More Hikes on the Way?

Companies -- like people -- can have a reputation. Some are steady; some are inconsistent. Often, this reputation comes with the territory. Consider the energy sector. It has a reputation for boom and bust cycles due to its dependence on volatile energy prices. But in the same way that a person can turn over a new leaf, companies get second chances too. One such company is Murphy Oil (NYSE: MUR).

In early 2020, the company offered a $0.25 dividend which was halved in May 2020, following the start of the pandemic. But, on Jan. 27, the board of directors for Murphy approved a $0.15/share quarterly dividend -- a hike of 20%. Murphy CEO Roger Jenkins noted that the increased dividend relies on the company's strategic plan, which assumes $65 oil prices. Of course, oil isn't trading at $65/barrel; it's over $90, which is great news for Murphy and its strategic plan. Even if oil prices do pull back from current levels, Murphy will generate significant cash flow -- which is exactly what it needs to execute its plan.

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Source Fool.com