This Terrific Dividend Stock Is Spending $5.6 Billion to Add Even More Fuel to Its Dividend Growth Engine
From Yahoo Finance: 2025-05-31 10:00:00
EOG Resources, an oil and gas producer, has delivered 27 years of sustainable dividends, growing its payout twice as fast as peers since 2019. Acquiring Encino Acquisition Partners for $5.6 billion will boost its dividend by 5%, increasing its yield over 3.5%. The deal will add 2 billion BOE of resources, enhancing production growth.
EOG Resources’ acquisition of Encino Acquisition Partners for $5.6 billion will immediately boost its financial metrics and cash flow. The deal will increase its undeveloped resources to 2 billion BOE, supporting future production growth. The company will fund the purchase with $2.1 billion in cash and $3.5 billion in new debt.
Despite the acquisition, EOG Resources maintains a strong balance sheet with $6.6 billion in cash and $4.7 billion in debt. The company’s leverage ratio remains low, even if oil prices fall to $45 per barrel. The deal is so accretive that EOG is increasing its dividend by 5%, on top of a previous 7% raise.
EOG Resources prioritizes dividends, aiming for sustainability and regular payments. The company also focuses on maintaining a strong balance sheet, investing in business growth, and returning cash to shareholders. With a history of share repurchases to reduce outstanding shares, EOG has capacity to return over 100% of annual free cash flow to shareholders.
Consider adding EOG Resources to your income portfolio for its strong dividend growth potential. The company has a solid track record of financial stability and growth. The recent acquisition will further fuel its dividend growth engine, making it an attractive option for dividend investors.