HOUSTON - Archrock, Inc. (NYSE:AROC), a leading energy infrastructure firm, has announced a 6% increase in its quarterly dividend to $0.175 per share, which on an annual basis amounts to $0.70 per share. This decision was made by the company's Board of Directors and reflects a 13% rise from the third quarter of 2023. The upcoming dividend is scheduled for payment on November 13, 2024, to shareholders on record as of November 6, 2024.
The company's President and CEO, Brad Childers, attributed this increase to Archrock's confidence in the sustained demand for natural gas and the company's robust platform performance. He also noted that the recent acquisition of TOPS contributed positively to the cash available for dividends. Childers emphasized Archrock's ongoing commitment to high-return investments and enhancing shareholder returns while maintaining sound dividend and leverage coverage ratios.
Archrock is recognized for its midstream natural gas compression services and aftermarket services for compression equipment owners across the United States. The company prides itself on powering cleaner American energy and has detailed its corporate ethos on its website.
The press release also contained forward-looking statements regarding Archrock's anticipated financial performance and dividend projections. However, these statements are subject to various uncertainties and risks, and actual outcomes could differ materially. These forward-looking statements are based on information available as of the date of the press release, and the company does not undertake any obligation to update them in light of new information or future events.
Investors and interested parties can find more detailed information about the risks and uncertainties affecting Archrock's business in its filings with the Securities and Exchange Commission, including its Annual Report for the fiscal year ended December 31, 2023, and its Quarterly Reports for the first two quarters of 2024.
This article is based on a press release statement from Archrock, Inc.
In other recent news, Archrock has made significant strides in its growth strategy, with a focus on earnings and revenue. The company's net income saw a substantial increase, reaching $34 million, up from $25 million in the same quarter of the previous year. Additionally, Archrock's adjusted EBITDA rose by 15% to $130 million.
The company recently completed the acquisition of Total Operations and Production Services (TOPS), a strategic move that enhances its natural gas compression services in the Permian Basin. This acquisition is expected to contribute significantly to Archrock's EBITDA growth and further solidify its competitive edge.
Investment firms Evercore ISI, JPMorgan, Citi, and Mizuho all initiated coverage on Archrock, with ratings ranging from Outperform to Overweight and Buy. These ratings underscore the positive outlook for Archrock's financial performance and strategic initiatives in the near future.
Archrock also priced an upsized private offering of $700 million in senior notes with a 6.625% interest rate, maturing in 2032, to partially fund the acquisition of TOPS. These are the recent developments that have been shaping Archrock's business landscape.
InvestingPro Insights
Archrock's recent dividend increase aligns with its strong financial performance and market position. According to InvestingPro data, the company boasts a robust revenue growth of 15.61% over the last twelve months as of Q2 2024, with an impressive EBITDA growth of 35.24% during the same period. These figures underscore the company's ability to generate increasing cash flows, supporting its dividend strategy.
InvestingPro Tips highlight that Archrock has maintained dividend payments for 11 consecutive years, demonstrating a consistent commitment to shareholder returns. This track record, coupled with the recent 6% dividend increase, reinforces the company's dedication to rewarding investors.
The company's price-to-earnings (P/E) ratio of 22.66 suggests a reasonable valuation, especially considering its growth prospects. An InvestingPro Tip indicates that Archrock is trading at a low P/E ratio relative to its near-term earnings growth, potentially signaling an attractive entry point for investors.
Archrock's strong financial health is further evidenced by its liquid assets exceeding short-term obligations, as noted in another InvestingPro Tip. This financial stability supports the company's ability to maintain and grow its dividend while pursuing growth opportunities like the TOPS acquisition mentioned in the article.
For investors seeking more comprehensive insights, InvestingPro offers additional tips and analysis on Archrock's financial performance and market position.
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