MINNEAPOLIS - Northern Oil and Gas, Inc. (NYSE: NOG) has announced an expansion of its shareholder return program, including an increase in its share repurchase activities and a planned rise in its quarterly dividend.
The company repurchased 895,076 shares of common stock during the second quarter of 2024 at an average price of $38.96 per share. In total, for the first half of the year, NOG bought back 1,444,432 shares at an average price of approximately $37.99 per share, allocating around $55 million to share repurchases.
Furthermore, NOG's Board of Directors has approved a new $150 million share repurchase authorization, which replaces the previous program that was nearly exhausted. The repurchases, which may occur in the open market or through privately negotiated transactions, will be subject to market conditions, legal requirements, and other business considerations.
In addition to the repurchases, Northern Oil and Gas has paid out approximately $80 million in dividends to its shareholders in the first half of 2024. The company's management plans to recommend a 5% increase to the quarterly common stock dividend, raising it to $0.42 per share for the third quarter of 2024, subject to Board approval. This proposed increase is attributed to strong cash flow and a robust business outlook, bolstered by pending acquisitions.
The CEO of NOG, Nick O'Grady, highlighted the company's multi-faceted approach to creating value for shareholders, noting the benefits of share repurchases and dividend increases alongside the pursuit of growth opportunities. Chad Allen, NOG's Chief Financial Officer, echoed this sentiment, pointing to the company's solid base business and pending acquisitions as drivers for potential future increases in shareholder returns.
Northern Oil and Gas is an asset company focused on acquiring and investing in non-operated minority working and mineral interests in major hydrocarbon-producing basins in the United States.
The information provided is based on a press release statement from Northern Oil and Gas, Inc.
In other recent news, Northern Oil and Gas has seen a flurry of activity from analysts and strategic partnerships.
Truist Securities adjusted its price target for the company to $54, despite this, the firm maintained a 'Buy' rating. This adjustment came after recalibrating its financial model, reflecting revised forecasts for the years 2024, 2025, and 2026. Simultaneously, RBC Capital maintained an Outperform rating on Northern Oil and Gas, highlighting the company's recent joint venture initiatives and expansion in the Uinta Basin.
Northern Oil and Gas has entered into significant joint ventures, including a $510 million deal with SM Energy (NYSE:SM) and an acquisition of XCL Resources. These ventures are expected to enhance the company's portfolio and improve its financial outlook. Additionally, SM Energy announced it acquired oil and gas assets in the Uinta Basin from XCL Resources for $2.55 billion. As part of this deal, Northern Oil and Gas will acquire a 20% interest in these assets.
The company has also reported strong first-quarter results for 2024, exceeding expectations due to effective performance and increased operational activity.
InvestingPro Insights
As Northern Oil and Gas, Inc. (NYSE: NOG) reinforces its commitment to shareholder returns through share buybacks and dividend increases, the company's financial health and market performance offer valuable insights. With a market capitalization of $4.04 billion and a notably low P/E ratio of 6.44, NOG demonstrates a valuation that might attract investors looking for potentially undervalued stocks. The company's P/E ratio has seen a slight increase to 6.68 over the last twelve months as of Q1 2024, indicating a stable earnings outlook.
InvestingPro Tips reveal that NOG has a track record of raising its dividend for three consecutive years, signaling a dedication to returning value to shareholders. This aligns with the company's recent announcement to increase its quarterly dividend. Additionally, a strong gross profit margin of 79.62% over the last twelve months as of Q1 2024 underscores NOG's efficiency in generating revenue over its cost of goods sold, which is a positive indicator for investors assessing the company's profitability.
Despite some analysts revising their earnings forecasts downwards for the upcoming period, NOG's stock has been characterized by low price volatility, which may appeal to investors seeking stable investments. The company's robust return of 18.39% over the last six months and a 5.79% return over the past year further highlight its performance in the market. For those interested in exploring additional insights, there are more InvestingPro Tips available that delve into NOG's financial and market metrics, which can be accessed for a deeper analysis.
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