Evolution Petroleum Corporation Offers Shareholders 4% Dividend Yield (EPM)
By: Ned Piplovic,
Featured Image Source: http://www.evolutionpetroleum.com/operations-delhi-photos.php
The Evolution Petroleum Corporation (AMEX:EPM) boosted its annual dividend for three consecutive years and its current $0.40 annualized dividend amount converts to a 4% dividend yield.
The company started paying dividends only in 2013 — a decade after its formation. After an aggressive dividend payout in the first year, the company cut its quarterly dividend distribution amount for its second full year of dividend distributions and has hiked its annual payout amount every year since then.
In addition to the strong dividend growth, the company’s share price has also recovered from a drop of more than 70% between February 2014 and January 2016 and has been on a steady rise since the beginning of 2018. After languishing below the 200-day Moving Average (MA) for more than eight months, the company’s 50-day MA broke above the 200-day MA at the end of February 2018 and continues to rise. Currently, the 50-day MA is more than 15% above the 200-day MA and the company’s current share price is another 12% above the 50-day MA.
While all investors interested in this equity should do their own research, the technical indicators, as well as the company’s financial results for the most recent quarter, provide signs that the company’s share price might continue rising, at least in the near term.
To claim eligibility for the next round of dividend distribution on the company’s June 29, 2018, pay date, enticed investors must take a position prior to the company’s upcoming ex-dividend date, which will occur on June 14, 2018.
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Headquartered in Houston, Texas, and founded in 2003, the Evolution Petroleum Corporation operates as an independent oil and gas company. The company acquires, exploits and develops onshore properties for the production of crude oil and natural gas in the United States. The company’s principal assets include interests in a CO2 enhanced oil recovery project (CO2-EOR) and the natural gas liquids recovery plant in the Delhi field Louisiana, which covers more than 13,000 acres.
The company has boosted its annual dividend for the past three years since cutting its quarterly payout 50% in the first quarter of calendar 2015. However, the company’s annual dividend doubled in just three years and the quarterly dividend payout is back to the same $0.10 that it was prior to the cut in 2015. Over the past three years, EPM raised its annual dividend amount at an average growth rate of 26% per year.
The most recent annual growth rate is even higher than the three-year average. The company’s current $0.10 quarterly dividend amount is nearly 43% higher than the $0.07 dividend distribution from the same period last year. This current quarterly amount translates to a $0.40 and a 4% forward dividend yield.
While the advanced share price growth since January 2018 prevented the company from attaining its goal of a 5% dividend yield, the company’s current dividend yield is almost 85% higher than the 2.2% average yield of the overall Basic Materials sector. Additionally, EPM’s current dividend yield is nearly 40% higher than the 2.9% average yield of all the companies in the Independent Oil & Gas industry segment.
The company’s share price was trending down from a late 2016 spike and continued this decline early in the trailing 12-month period. With some fluctuations, the share price declined more than 13% between early June and December 13, 2017, when the share price reached its 52-week low of $6.45. However, after reversing its direction in mid-December 2017, the share price erased all its losses by the first week of February 2018 and continued its ascent to close on June 4, 2018 at its 52-week high of $10.05, which was nearly 56% above the 52-week low from mid-December 2017.
The share price pulled back 1.5% over the next two trading sessions and closed on June 6, 2018, at $9.90, which was 33% higher than it was one year earlier and 53.5% above the 52-week low from December 2017. However, the June 6, 2018 closing price was still 2% short of its level from five years ago. Because the current share price barely managed to return to its level from five years earlier, the company’s total return over the period is only 5.4%. The three-year total return is significantly higher at 40.3%. However, most of that return occurred in the last 12 months. The total return on shareholders’ investment over the past year came in at 35.8%.
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Ned Piplovic is the assistant editor of website content at Eagle Financial Publications. He graduated from Columbia University with a Bachelor’s degree in Economics and Philosophy. Prior to joining Eagle, Ned spent 15 years in corporate operations and financial management. Ned writes for www.DividendInvestor.com and www.StockInvestor.com.