AUS
NZ
UK
CA
USA
IND
Summary
- High Dividend-paying stocks provide an excellent source to generate passive income.
- In the United Kingdom, Dividend’s payments were down by 49% in the third quarter of 2020.
- As the economy is on the recovery path, the companies have started coming out of the COVID’s impact and are back on the track of dividend distribution.
Dividends help in amplify an investor’s return and high dividend-paying stocks act as a passive source of income generation and provide an opportunity to diversify the portfolio as well. These stocks are quite popular among investors as they deliver consistent returns. Also, an investor may choose to reinvest or withdrawn their dividends received. From here, an investor needs to focus on an crucial ratio, dividend yield, it is an important ratio calculated by dividing the dividend paid and price of the stock. In a usual circumstance, dividend yield falls when the stock price rise, while it rises when the stock prices fall.
In Q1 2020, global dividends numbers reported a fall of 22%, diving by £82.6 billion during the crisis as the company went on to conserve cash in the fight against COVID-19. The companies which deferred or cancelled dividend payments constituted one fifth from Oil & Gas Sector. Subsequently, followed by further Lockdown, dividend payment was down by 49% for the UK in Q3 of 2020 as companies either cut or suspended their cash distribution process.
Also read: 5 Dividend Stocks to Look at For Retirement Planning
Copyright © 2021 Kalkine Media
But now, as the economy is on the recovery path, the companies have started coming out of the COVID’s impact and are back on the track of dividend distribution. Here we will have a look at 5 oil and gas sector stocks with over six per cent of dividend yield.
Diversified Energy Company PLC (LON: DEC)
Diversified Energy is an FTSE-listed oil and gas production company that has its operation in the US. The company has an annual dividend yield of 9.62%. The company reported an Adjusted EBITDA of $146 million and a net income of $18 million for the six-month ending 30 June 2020. Because of low commodity prices and a non-cash charge of $110 used to settle a long-dated derivative contract portfolio, the company reported a net operating loss of $31 million and gross profit stood at $30 million.
The company has recently announced the acquisition of Blackbeard for the consideration of US$166 million. Through this Central regional focus area (RFA) acquisition, the company will get another 820 wells which will produce 16,000 barrels of oil equivalent per day (boepd).
The company has a market capitalisation of around £792 million. The stock of the company was trading at GBX 113.20, down by 0.53 per cent at10:34 AM on 25 May 2021.
Seplat Petroleum Development Company PLC (LON:SEPL)
A Nigerian oil and gas company is listed on Nigerian as well as on London stock exchanges. The company has an annual dividend yield of 6.05%, whereas a 5-year average dividend yield stood at around 10%.
For the three months ending 31 March 2021, EBITDA for the company stood at $77.8 million. Revenue was up by 16.8% to $152.4 million in the first quarter of 2021. Within the first 21 days of April, the company’s boepd successfully reached nearly 54,000 on an average volume per day basis. In its Q1 2021 results, the company declared a dividend of US2.5 cents per share. Total capital expenditure for Q1 stood at $32.6 million, and for the full year, it is expected to be $150 million.
With a market capitalisation of £540 million, the stock of the company was trading at GBX 91.80 at 10:35 AM on 25 May 2021.
Gulf Keystone Petroleum Ltd (LON:GKP)
Gulf Keystone, the Shaiken field operator, has a market capitalisation of around £351 million. An FTSE-Listed company has annual dividend yield of about 7%.
For FY 2020, the company’s gas production was 36,625 boepd compared to 32,883 boepd in FY 2019. Revenue reported for the yea stood at $108.4 million compared to $206.7 million in 2019.
The stock of the company was trading at GBX 164.00 at 10:36 AM on 25 May 2021. Its market capitalisation stood at GBP 345.35 million.
Also Read: 5 Best Dividend Yielding Stocks from FTSE 100 to Have an Eye On
Wentworth Resources PLC (LON:WEN)
The company in Tanzania is a domestic natural gas producer and an AIM-listed company. The company has the aim to provide reliable and low-cost power nationwide by 2030.
With an annual dividend yield of around 6%, the company distributed a total dividend of $3.8 million in 2020 compared to $3.0 million in 2019. Maintaining its resilient performance despite COVID-19, the company reported revenue of $18.9 million for the year ended 31 December 2020 slightly better than the revenue of $18.6 million a year ago.
The stock of the company was trading at GBX 24.50, at 10:36 AM on 25 May 2021. Its market capitalisation stood at GBP 45.46 million.
BP PLC (LON: BP.)
An FTSE 100 constituent company with its diverse portfolio has operations in 78 countries. In its latest results of Q1 2021, the company’s profit stood at $4.7 billion as compared to $1.4 billion a quarter ago. This performance was backed by exceptional gas marketing and trading performance. The company has successfully reduced its debt, which currently stood at $33.3 billion as of 31 March 2021.
ALSO READ: BP's plan for zero carbon emission by 2050, will other companies follow the suite?
The 5-year average dividend yield for the company is approximately 7%. The company is expecting to return around 60% of its surplus cash flow to shareholders with share buybacks.
The stock of the company was trading at GBX 315.25 at 10:38 AM on 25 May 2021. Its market capitalisation stood at GBP 64,089.00million.
