Covered — raised 17%, eighth increase in five years. A 2.92% yield on a 26.83% trailing payout is covered with room to spare: $0.4375 a quarter, raised 17% from $0.375 on October 21, 2026 for payment December 4, 2026. Management called it the eighth increase in five years and tied it to free cash flow generation and debt repayment — the highest yield in this batch on a payout that is still under 30%.
Key risk: Commodity price — Delaware Basin oil and gas prices drive earnings and free cash flow, so a price fall hits the cash flow behind both the dividend and the debt paydown.
Changes if: The payout pushes well past 26.83%, free cash flow falls short of the $1.75 annualized rate, or the run of raises stops. On current coverage the dividend has room.
- ✓Payout-coverage check: 26.83% of trailing earnings leaves nearly three-quarters of earnings behind the dividend.
- ✓Yield check: 2.92% indicated — $0.4375/qtr × 4 at the $59.96 close on Oct. 23, 2026. Real, earned cash dividend, the highest yield in this batch.
- ✓Dividend growth check: Raised 17% in October 2026, from $0.375 to $0.4375 — the eighth increase in five years, from $0.05 a quarter in 2022.
What this grade doesn't say: It screens the dividend only — covered, real, compounding. It says nothing about valuation or price: a well-covered payer can still be overpriced, and its price can still fall.