This Oil Stock is Getting Creative With Its Dividend
Oil companies have a poor track record as dividend stocks. The shareholder payout is usually the first thing to go when crude oil prices take a tumble, which has happened frequently in recent years. Now most income investors have sworn off the sector because it's become an unreliable source of cash flow.
However, one oil stock is seeking to change the narrative around the sector by adjusting how it pays dividends. Instead of focusing on delivering a high base payout -- which runs to risk of a reduction at the next oil price crash -- Pioneer Natural Resources (NYSE: PXD) plans to add a variable dividend based on oil prices. This strategy could serve as a new model in the sector by rewarding income investors during periods of higher oil prices, without completely abandoning them during more turbulent market conditions.
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Source Fool.com
