Dividends -- FANG -- Diamondback Energy -- June 22, 2022

FANG raises dividend by 7.1% and return of capital to at least 75% of free cash flow, from its previous commitment of at least 50% of free cash flow, at the beginning of 3Q22. Paywall.

Without paywall, StreetInsider: 

Diamondback Energy, Inc. announced the next step in its return of capital program.

Beginning in the third quarter of 2022, the company’s board of directors has approved an increase to its return of capital commitment to at least 75% of free cash flow (as defined below), from its previous commitment of at least 50% of free cash flow. 

Additionally, the company today announced its intention to increase its base dividend to $3.00 per common share annually ($0.75 per quarter) beginning with the second quarter of 2022. When declared, this will represent a 7.1% increase from the company's previous annual base dividend of $2.80 per share ($0.70 per quarter) and implies a 2.5% annualized yield based on the June 17, 2022 closing share price of $122.29. Diamondback’s base dividend will remain its primary mechanism for returning capital to stockholders, with additional return of capital expected to come in the form of variable dividends and opportunistic share repurchases.

For the second quarter of 2022, the company plans to maintain its first quarter 2022 base-plus-variable dividend payout of $3.05 per share, which implies a 10.0% annualized yield based on the June 17, 2022 closing share price of $122.29. 

Diamondback has also repurchased 1,966,516 shares of its common stock for approximately $253 million to date during the second quarter at a weighted average price of approximately $128.42 per share. While the second quarter has not yet ended, the company expects that the combination of these stock repurchases together with its expected base-plus-variable dividends for the quarter will constitute a return of capital to stockholders well in excess of 50% of Diamondback’s free cash flow for the second quarter.

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