Magnolia Oil and Gas Corp. announced Jan. 31 it will be distributing a cash dividend of $0.115 per share of class A common stock and a cash distribution of $0.115 per class B common stock to shareholders on record as of Feb. 10, payable on March 1.
The distribution is a 15% increase to the company’s quarterly dividend rate and is a payout rate of $0.46 per share annualized.
Magnolia’s business model principles maintain low leverage and limit capital spending to generate consistent cash flow and volume growth, said Chris Stavros, Magnolia president and CEO in a Jan. 31 press release.
“Magnolia’s philosophy toward dividends is meant to appeal to long-term investors who seek dividend safety, consistent dividend growth, and a dividend that is paid out of actual earnings generated by the business,” said Stavros. “We believe that our dividend is secure at product prices below mid-cycle levels and expect the dividend to grow annually as we continue to execute our business plan.”
The company plans on reducing outstanding shares by 1% per quarter and anticipates total production in 2023 to grow by approximately 10%. Total production growth exceeded 14% in 2022.
“Our ongoing efforts toward reducing our outstanding shares and delivering moderate annual production growth are expected to support annual dividend growth of approximately 10% over time, which is an important component of Magnolia’s total shareholder return proposition,” said Stavros in the press release.
Magnolia is an oil and gas E&P company operating primarily in Texas’ Eagle Ford and Austin Chalk.