HOUSTON - Archrock, Inc. (NYSE:AROC), a prominent natural gas compression services provider, has announced the maintenance of its quarterly dividend at $0.165 per share. This declaration, consistent with the previous quarter, represents a 6% increase year-over-year. The upcoming dividend is scheduled for payment on August 13, 2024, to shareholders recorded as of August 6, 2024.
Brad Childers, President and CEO of Archrock, underscored the company's commitment to shareholder returns, stating the dividend is well-covered and aligns with their capital return strategy. Childers also expressed optimism about the anticipated acquisition of Total Operations and Production Services, expected to close by the end of 2024. He anticipates this move to be immediately accretive to earnings per share and to enhance cash available for dividends, potentially leading to increased shareholder dividends over time.
Archrock specializes in midstream natural gas compression, with a focus on supporting the production, compression, and transportation of natural gas in a responsible manner. The Houston-based company also provides aftermarket services for compression equipment owners across the United States.
The press release also contained forward-looking statements regarding the expected benefits of the Total Operations and Production Services acquisition. These include projections about earnings accretion and positive impacts on dividend growth and coverage. However, the company noted that these statements are based on current assumptions and are subject to risks and uncertainties that could cause actual results to differ.
Investors are advised that forward-looking statements should not be seen as guarantees but rather as the company's expectations as of the current date. Archrock has made it clear that it does not undertake any obligation to publicly update or revise any forward-looking statements in light of new information or future events.
Details about Archrock's financial performance and risk factors are available in its Annual Report on Form 10-K for the fiscal year ended December 31, 2023, and other filings with the Securities and Exchange Commission.
This news report is based on a press release statement from Archrock, Inc.
In other recent news, Archrock has seen a flurry of financial activities and strategic moves. The company has increased its net income to $41 million in Q1 2024, up from $16 million in the same period last year, leading to an upward revision of its full-year adjusted EBITDA guidance. This positive financial performance has prompted RBC Capital to upgrade its price target for Archrock from $21.00 to $22.00, maintaining an outperform rating.
Archrock is also making significant strides in the natural gas compression sector with the announcement of a public offering of 11 million shares. The funds raised from this offering are intended to partially finance the acquisition of Total Operations and Production Services, LLC (TOPS), a deal valued at $983 million.
The acquisition of TOPS, a strategic move to bolster Archrock's position in the Permian Basin, is expected to enhance the company's service offerings and market position. Stifel has also shown confidence in Archrock's strategic moves, raising its price target for the company to $25.00 from the previous $23.00, while maintaining a Buy rating.
These recent developments highlight Archrock's strategic advancements in the natural gas compression sector, with the potential for future growth through the acquisition of TOPS and the successful public offering of shares.
InvestingPro Insights
In light of Archrock, Inc.'s (NYSE:AROC) recent dividend maintenance announcement, insights from InvestingPro reveal a company that stands on solid financial and operational ground. With a market capitalization of $3.58 billion, Archrock trades at a forward P/E ratio of 27.83, which is considered low relative to its near-term earnings growth, according to one of the InvestingPro Tips. This could suggest that the stock is potentially undervalued, offering an attractive entry point for investors who are bullish on the company's prospects.
Furthermore, Archrock's commitment to shareholder returns is evidenced by its track record of maintaining dividend payments for 11 consecutive years, another highlight from the InvestingPro Tips. The company's dividend yield as of the latest available data stands at 3.04%, with a notable dividend growth of 10.0% over the last twelve months.
From an operational perspective, Archrock has demonstrated strong performance with a revenue growth of 17.17% over the last twelve months as of Q1 2024. This robust growth aligns with CEO Brad Childers' optimism regarding the anticipated acquisition of Total Operations and Production Services and its potential to enhance earnings and dividend coverage.
For investors looking to delve deeper into Archrock's financials and future prospects, InvestingPro offers additional tips and metrics. To explore these insights and make more informed investment decisions, consider using the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription. With 8 more InvestingPro Tips available, investors can gain a comprehensive understanding of Archrock's investment potential.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.