Marathon Oil Corp's Dividend Analysis

Dissecting Marathon Oil Corp's Dividend Sustainability and Growth

Marathon Oil Corp(NYSE:MRO) recently announced a dividend of $0.11 per share, payable on 2024-03-11, with the ex-dividend date set for 2024-02-20. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Marathon Oil Corps dividend performance and assess its sustainability.

What Does Marathon Oil Corp Do?

Marathon Oil Corp is an independent exploration and production company primarily focusing on unconventional resources in the United States. At the end of 2022, the company reported net proved reserves of 1.3 billion barrels of oil equivalent. Net production averaged 343 thousand barrels of oil equivalent per day in 2022 at a ratio of 70% oil and NGLs and 30% natural gas.

Marathon Oil Corp's Dividend Analysis
Marathon Oil Corp's Dividend Analysis

A Glimpse at Marathon Oil Corp's Dividend History

Marathon Oil Corp has maintained a consistent dividend payment record since 1991. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.

Breaking Down Marathon Oil Corp's Dividend Yield and Growth

As of today, Marathon Oil Corp currently has a 12-month trailing dividend yield of 1.75% and a 12-month forward dividend yield of 1.88%. This suggests an expectation of increased dividend payments over the next 12 months.

Over the past three years, Marathon Oil Corp's annual dividend growth rate was 17.00%. Extended to a five-year horizon, this rate decreased to 3.20% per year. And over the past decade, Marathon Oil Corp's annual dividends per share growth rate stands at -15.60%.

Based on Marathon Oil Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Marathon Oil Corp stock as of today is approximately 2.05%.

Marathon Oil Corp's Dividend Analysis
Marathon Oil Corp's Dividend Analysis

The Sustainability Question: Payout Ratio and Profitability

To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-09-30, Marathon Oil Corp's dividend payout ratio is 0.14.