Magnolia Oil & Gas hikes dividend by 15 percent

HOUSTON - Magnolia Oil & Gas Corporation (NYSE: MGY) has raised its quarterly dividend by 15 percent, marking the fourth consecutive year of dividend increases since the company initiated payouts in 2021. The announcement today detailed that Class A shareholders and Class B unit holders of record as of February 14, 2025, will receive a cash dividend of $0.15 per share and a cash distribution of $0.15 per unit, respectively, on March 3, 2025. This increment brings the annualized dividend to $0.60 per share.

The company’s President and CEO, Chris Stavros, attributed the dividend increase to Magnolia’s operational achievements in 2024, which included a 9 percent total production growth, a 5 percent reduction in total shares outstanding, and significant strides in reducing field-level cash operating costs. Stavros emphasized that Magnolia’s adherence to a business plan characterized by low leverage, disciplined capital spending, steady annual production growth, and high pre-tax margins has been instrumental in enhancing the company’s dividend payout capacity. InvestingPro analysis confirms the company’s strong financial position, with an impressive gross profit margin of 84% and a healthy current ratio of 1.47, indicating solid operational efficiency and liquidity management.

Stavros also underscored the resilience of Magnolia’s dividend, stating that it remains secure even at substantially lower product prices, appealing to long-term investors who prioritize dividend stability through various commodity cycles. He reiterated the company’s commitment to delivering a sustainable, safe, and growing dividend as a cornerstone of Magnolia’s total shareholder return strategy. The company’s financial strength is reflected in its return on equity of 21% and return on invested capital of 20%, as reported by InvestingPro, which rates the company’s overall financial health as "GOOD" based on comprehensive analysis of multiple financial metrics. For detailed insights into Magnolia’s valuation and growth potential, investors can access the complete Pro Research Report, available exclusively to InvestingPro subscribers.

Magnolia Oil & Gas is an oil and gas exploration and production company that operates primarily in South Texas, focusing on the Eagle Ford (NYSE:F) Shale and Austin Chalk formations. The company prides itself on a disciplined approach to capital spending, aiming to achieve moderate annual production growth, high pre-tax margins, and consistent free cash flow to facilitate strong cash returns to shareholders.

This news is based on a press release statement and reflects the company’s current financial and operational position. Magnolia’s forward-looking statements are subject to risks and uncertainties, including market conditions and regulatory changes, which could affect future financial results and operational plans.

In other recent news, Magnolia Oil & Gas Corp has been the subject of several key developments. Goldman Sachs has downgraded the company’s stock rating from Buy to Neutral and reduced the price target to $26.00. This follows the company’s achievement of its 2024 key initiatives, such as reducing operating expenses and maintaining a low reinvestment rate. Meanwhile, JPMorgan has revised Magnolia’s stock target to $26.00, also maintaining a Neutral rating, despite forecasting a slight shortfall in cash flow and EBITDA for Q4 2024.

Magnolia has also appointed R. Lewis (JO:LEWJ) Ropp, a finance expert, as an independent director, expected to bring extensive industry insight and financial expertise. In a bid to bolster its financial stability, the company has secured a $1.5 billion credit facility and announced a private placement of $400 million in senior unsecured notes due 2032.

Despite challenges faced by short sellers in the energy sector, with $21.9 billion in year-to-date mark-to-market losses, the overall short interest in the sector has increased by $4.9 billion to $83.2 billion. These are recent developments that continue to shape Magnolia’s financial and operational landscape.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.