Focus on 5 High Dividend Yield FTSE Oil & Gas Stocks

Summary

  • Many companies, which had withheld dividend, have started resuming payouts.
  • Last year, half of the dividend cuts were from the Oil & Gas sector
  • BP has announced a dividend of 5.25 cents per share for Q1. 

Dividends matter a lot to investors, especially during times of uncertainty. Amid the pandemic, most listed companies in UK markets disappointed investors by withholding dividends. They have been either aggregating, restarting, or holding outflows. However, once the situation started improving for more and more companies, most resumed their dividend payouts.

As per the latest report, shareholder earnings were up by 8 per cent in 2021 compared to the first quarter of 2020, when payouts fell by 26.7 per cent.  Around half of the cuts were coming from the Oil & Gas sector with strained payouts in early 2020.

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Lets’ have a look at how a few high dividend yield Oil & Gas sector stocks are faring in post pandemic recovery.

  • BP PLC (LON: BP)

It is a British multinational oil and gas company based in London. It is one of the major oil companies in the world with brands like Castrol, BP, Aral, Amoco, etc. in its portfolio. It was established in 1908 in Persia. It has transitioned from coal to gas and now works, with a mix of energy sources for a lower carbon future. 

ALSO READ: BP's plan for zero carbon emission by 2050, will other companies follow the suite?

The stock pegged at GBX 298.85, gaining 0.11 per cent on 27 April at 9:50 am GMT+1. BP Plc has an annual dividend yield of 6.88 per cent.

The company has beaten market expectations with its Q121 SEA on Tuesday (27 April), displaying strong earnings and cash flow position. The company announced a dividend of 5.25 cents per share for the first quarter. 

It reached a net debt target early by around a year and reported a US $500 million share buybacks in the second quarter. It is to use 60 per cent of surplus cash for 2021 for share buybacks and the remaining 40 per cent to strengthen its position. A detailed outline is expected further in second quarter results.

  • Wentworth Resources Plc (LON: WEN)

It is an AIM-listed, natural gas producer in Tanzania. It aims to provide low-cost reliable energy access. It currently has the only onshore domestic gas licence and has the Tanzanian government as its partner. It has a long-term outlook on Sub Saharan Africa, with bright growth prospects.

Shares were at GBX 23.36, up 6.19 per cent on 27 April at 9:45 am GMT+1. The stock has given a return of over 28 per cent in last one year. Wentworth Resources Plc has an annual dividend yield of 6.44 per cent.

Recently, it released audited financial results for the year ended 31 December 2020 and proposed a final dividend declaration on 21 April. It declared a final dividend of 1.0 pence per share, to be paid on 25 June. Revenues were of US$18.9 million supported by long-term fixed gas price pacts. It became debt free with cash on hand of US$17.8 million on 31 December 2020. It is currently at an all-time high production volume.

  • Seplat Petroleum Development Company Plc (LON: SEPL) 

It is a Nigerian oil and gas company, supplying one-third of natural gas used in Nigerian Power Generation. It is listed on both the Nigerian and London Stock Exchange. It has profitable operations, strong cash flows and considers organic and inorganic growth approaches.

On, 27 Apr, 9:31 am GMT+1, its’ share was at GBX 80.84, up 2.07 per cent. The stock has given a return of around 50 per cent in the last one year. Seplat Petroleum Development Company Plc has an annual dividend yield of 9.00 per cent. 

It published its annual report for the year ended 31 December 2020 on 14 April. The company is to hold its AGM on 20 May. The director’s statement highlighted very high risk and mitigation steps. These risks were mainly related to field operations and project deliverability, third-party infrastructure downtime, COVID-19 outbreak in Seplat, availability of capital and Niger Delta stability and security.

  • Diversified Gas & Oil Plc (LON: DGOC)

It is an energy company with business spread across production, selling, and transport of natural gas & oil from the Appalachian Basin in the US. It operates efficiently with a regional focus and robust margins.

Its shares were trading at GBX 109.98, 0.56 per cent lower on Tuesday, 26 April at 10:02 am GMT+1. Diversified Gas & Oil Plc has an annual dividend yield of 10.01 per cent. The company’s Annual General Meeting is scheduled for 27 April. 

The latest announcement earlier in the month reaffirmed its current borrowing base and liquidity position. The company is mindful of the perplexing pandemic volatility. It is working with the business strategy of credit leverage to support its’ hedging and financing activities.

ALSO READ: How will Biden's Presidency impact the US energy industry?

  • Gulf Keystone Petroleum Ltd (LON: GKP)

It is another independent oil field operator in Kurdistan area of Iraq. It initially had operations in Algeria but is now has offices in Iraq, Bermuda, & UK. Its operational strategy is to increase production in a phased manner, whilst keeping strict financial control and safe operations. It is an ESG focused company delivering value to shareholders.

Its’ stock pegged at GBX 180.80 GBP, up 0.14 per cent on 27 Apr, 10:05 am GMT+1, close to months high. The stock has been on a gaining spree since it announced a receivable recovery of USD 29.4 million from the Kurdistan Regional Government.

Gulf Keystone Petroleum Ltd has an annual dividend yield of 14.30 per cent.

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