HOUSTON - Magnolia Oil & Gas Corporation (NYSE:MGY), an exploration and production company, has announced an increase in its quarterly dividend. The Board of Directors declared a cash dividend of $0.13 per share of Class A common stock and a cash distribution of $0.13 per Class B unit. This dividend is payable on March 1, 2024, to shareholders of record as of February 16, 2024. The announcement reflects a 13 percent increase from the previous dividend rate and results in an annualized dividend of $0.52 per share.
This marks the third consecutive year of dividend increases by Magnolia since the company initiated dividend payments in 2021. The company's President and CEO, Chris Stavros, attributed the dividend growth to Magnolia's strong performance in 2023, which saw a 9 percent increase in total production and a 4 percent reduction in outstanding shares through repurchase activities. Stavros emphasized the company's commitment to maintaining low leverage, disciplined capital spending, and modest annual production growth to sustain high pre-tax margins and steady free cash flow.
According to Stavros, these financial principles have enhanced Magnolia's capacity to provide a consistently growing dividend, which he described as secure even at lower product prices. He stated that this approach is designed to attract long-term investors who prioritize dividend safety across commodity cycles. The company's strategy aims to deliver a sustainable and growing dividend as a key element of its total shareholder return strategy.
Magnolia operates primarily in South Texas, focusing on the Eagle Ford (NYSE:F) Shale and Austin Chalk formations. The company prides itself on generating shareholder value through steady production growth and efficient capital spending, leading to high pre-tax margins and consistent free cash flow.
The press release also included cautionary statements regarding forward-looking information, which is subject to risks and uncertainties that could cause actual results to differ materially from those projected. The information is based on a press release statement from Magnolia Oil & Gas Corporation.
InvestingPro Insights
In light of Magnolia Oil & Gas Corporation's (NYSE:MGY) recent announcement regarding dividend increases, investors may find the following InvestingPro Insights valuable for a comprehensive understanding of the company's financial health. With a market capitalization of $4.14B, Magnolia has demonstrated financial prudence by holding more cash than debt, as noted in one of the InvestingPro Tips. This is a reassuring sign for investors, especially those who are income-focused and may be attracted to the company's dividend growth, which has been raised for 3 consecutive years—a testament to Magnolia's commitment to returning value to shareholders.
The company's gross profit margin stands at an impressive 84.27% for the last twelve months as of Q3 2023, which aligns with another InvestingPro Tip highlighting Magnolia's impressive gross profit margins. This high margin underscores the company's operational efficiency and its ability to maintain profitability. Additionally, Magnolia's stock has been recognized for generally trading with low price volatility, offering a degree of stability in an investor's portfolio.
For those seeking further insights and tips, InvestingPro offers additional information, including analysis on stock price movements and cash flow adequacy. Subscribers can access these insights at a special New Year sale discount of up to 50%. To enhance the value of a 2-year InvestingPro+ subscription, use coupon code "SFY24" for an additional 10% off, or "SFY241" for an additional 10% off a 1-year subscription. Discover the full range of InvestingPro Tips, which currently lists over 11 additional tips for Magnolia, by visiting https://www.investing.com/pro/MGY.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.