Oil companies have a poor reputation when it comes to paying dividends. Many oil producers have only paid their investors a pittance over the years, instead opting to reinvest all their cash flow to chase production growth. Others, meanwhile, slashed their higher-yielding dividends when crude prices crashed in 2014 so that they could stay afloat. Most income-focused investors have simply chosen to avoid the sector.
For many years, EOG Resources (NYSE: EOG) had been part of the industry's problem, having paid a paltry dividend that often yielded less than 1%. The shale driller, however, has put a priority on increasing its payout in recent years. CEO Bill Thomas laid out the company's vision for its dividend on the second-quarter conference call, which is part of an ambitious plan to become an elite value creator.
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