Pioneer Natural Resources Company (NYSE: PXD) looks like a good stock, and it will be ex-dividend soon
A pioneer in natural resources (NYSE: PXD) is set to trade off-dividend within the next four days. The ex-dividend date occurs one day before the record date, which is the day on which shareholders must be on the books of the company to receive a dividend. The ex-dividend date is important because the settlement process involves two full business days. So if you miss this date, you would not appear on the books of the company on the date of registration. Thus, you can buy Pioneer Natural Resources shares before December 30 in order to receive the dividend that the company will pay on January 14.
The company’s next dividend payment will be US $ 0.62 per share. Last year, in total, the company distributed US $ 2.48 to shareholders. Based on the value of last year’s payouts, Pioneer Natural Resources has a return of 1.4% on the current price of $ 180.03. Dividends are an important source of income for many shareholders, but the health of the business is crucial to sustaining these dividends. Therefore, readers should always check whether Pioneer Natural Resources has been able to increase its dividends or if the dividend could be reduced.
Dividends are usually paid out of the company’s profits, so if a company pays more than it earns, its dividend is usually at risk of being reduced. Thatâs why itâs good to see Pioneer Natural Resources donate a modest 34% of its profits. Yet cash flow is usually more important than earnings in assessing dividend sustainability, so we always need to check whether the company has generated enough cash to pay its dividend. It distributed 43% of its free cash flow in the form of dividends, a comfortable level of distribution for most companies.
It is positive to see that the dividend from Pioneer Natural Resources is covered by both earnings and cash flow, as this is usually a sign that the dividend is sustainable, and a lower payout ratio usually suggests a higher payout ratio. large margin of safety before the dividend is cut.
NYSE: Historical PXD Dividend December 25, 2021
Have profits and dividends increased?
Stocks of companies that generate sustainable earnings growth often offer the best dividend prospects because it’s easier to raise the dividend when earnings rise. Investors love dividends, so if profits fall and the dividend is reduced, expect a stock to be sold massively at the same time. Luckily for readers, Pioneer Natural Resources’ earnings per share have grown 16% per year for the past five years. Earnings per share are growing rapidly and the company keeps more than half of its profits with the company; an attractive combination that could suggest that the company is focusing on reinvestment to further increase profits. This will make it easier to fund future growth efforts and we think this is an attractive combination – plus the dividend can always be increased later.
Another key way to measure a company’s dividend outlook is to measure its historical rate of dividend growth. Since our data began 10 years ago, Pioneer Natural Resources has increased its dividend by around 41% per year on average. Both earnings per share and dividends have been rising rapidly lately, which is great to see.
The bottom line
Should investors buy Pioneer Natural Resources for the next dividend? We like the fact that Pioneer Natural Resources is increasing earnings per share while simultaneously paying out a small percentage of earnings and cash flow. These characteristics suggest that the company is reinvesting in growing its business, while the prudent payout ratio also implies reduced risk of dividend reduction in the future. Pioneer Natural Resources looks strong on this analysis overall, and we would certainly consider taking a closer look.
Although it is tempting to invest in Pioneer Natural Resources purely for dividends, you should always be aware of the risks involved. For example – Pioneer Natural Resources has 1 warning sign we think you should be aware.
However, we don’t recommend simply buying the first dividend stock you see. here is a list of interesting dividend-paying stocks with a yield above 2% and a future dividend.
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