- Unlike many United States shale oil and gas companies, EOG Resources has a good reputation for consistently producing solid performance for their shareholders.
- This was evident throughout the downturn of 2020 and subsequently during 2021 with their guidance for 2022 pointing towards massive free cash flow that should set a new record.
- Since they sport zero leverage and strong liquidity, they have no handbrakes upon returning all of their free cash flow to their shareholders.
- Since management prefers special dividends instead of share buybacks, it effectively means that dividends are their only choice for deploying their free cash flow.
- Thanks to these very strong oil prices, they could provide a very high 10%+ dividend yield on current cost during 2022, and thus, I believe that a buy rating is appropriate.
For further details see:
EOG Resources: Dividends Are Their Only Choice, 10%+ Yield Possible