Oil and gas operator,
Anadarko Petroleum Corp.
) board of directors announced its approval of a 100% hike in the
quarterly dividend rate payable on Sep 25, 2013, to shareholders
of record at the close of business on Sep 11, 2013. The company
doubled its quarterly dividend to 18 cents from the prior 9
Anadarko Petroleum has consistently performed well recording
healthy earnings surprises in the last four quarters, which led
to an average earnings beat of 18.65%. This paved the way for the
current dividend increase.
Its strong financial performance in the second quarter of 2013
also prompted the company to take this step. It registered an
85.4% increase in the cash balance to $4.6 billion in the second
quarter from $2.5 billion as of Dec 31, 2012. This was supported
by a 25.2% year-over-year increase in operating cash flow to $2.5
billion at the end of Jun 30, 2013.
The hike in the quarterly cash dividend speaks of Anadarko's
efforts to boost shareholder wealth. Although the company's
dividend history has not been that striking, we believe the
current dividend raise will most certainly capture investors'
attention in the stock.
The sound balance sheet position will encourage the company's
ongoing multiple exploration ventures in the Gulf of Mexico and
Mozambique, which will accentuate its returns. Moreover, the
shale resources are offering attractive growth opportunities,
which the company will capitalize through its sizeable interests
in the resource-rich East Texas and Wattenberg horizontal
We anticipate these factors will help position Anadarko
Petroleum for future growth. However, it needs to tread
cautiously owing to the lingering threat of political instability
in Africa. The company at the moment carries a Zacks Rank #3
Other operators in the sector hiking their dividends in the
first half of 2013 include
Occidental Petroleum Corp
), with a raise of 18.5% to 64 cents,
Magellan Midstream Partners LP
) increasing the quarterly cash distribution by 21% to 50.8 cents
Markwest Energy Partners, L.P.
) raising the cash distribution by 5.0% to 84 cents.
Based in The Woodlands, Texas, Anadarko Petroleum presently
has a market capitalization of $40.88 billion.
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