Matador Resources Company (NYSE:MTDR) has announced plans to increase its dividend to $0.20 on December 1st, marking a rise from the same period last year. The new dividend will result in an annual payment equating to 1.3% of the current stock price, which is below industry averages. This decision comes as the company's earnings amply cover the dividend, allowing a significant portion to be reinvested into business operations.
Despite the company's short payment history, which raises some questions about long-term sustainability, Matador Resources has maintained consistent dividends in recent years. With an anticipated earnings per share (EPS) growth of 32.2% over the next year, the payout ratio could potentially decrease to a sustainable 6.9%.
The company's five-year EPS growth rate stands at 35%, indicating potential for further dividend growth. The combination of a low payout ratio and growing earnings suggests there is room for future dividend escalation. Given these factors, Matador Resources presents itself as an appealing income stock with robust potential as a dividend stock.
InvestingPro Insights
InvestingPro's real-time data and tips provide additional insights into Matador Resources Company (NYSE:MTDR). According to InvestingPro, Matador Resources has demonstrated a high return on invested capital and strong earnings, which should allow for the continuation of dividend payments. This aligns with the company's recent announcement of an increased dividend. Additionally, the company has a history of raising its dividend for three consecutive years, further supporting its potential as a dividend stock.
InvestingPro's data highlights a market cap of $7190 million and a P/E ratio of 8.54. Over the last twelve months as of Q3 2023, the company has reported revenue of $2503.43 million and a gross profit margin of 80.39%. The company's return on assets for the same period stands at 14.22%.
These data points and tips, among many others available on InvestingPro, provide a fuller picture of Matador Resources' financial performance and potential for future growth. For more in-depth insights and tips, consider exploring InvestingPro's comprehensive resources.
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