EOG Resources, Inc. (NYSE:EOG) is one of the best dividend stocks to buy. On August 20, Melius Research began coverage of EOG, assigning a Buy rating and setting a price target of $173. The firm noted that the company’s disciplined use of core is a good reason for its favorable outlook. The firm noted that EOG Resources, Inc. (NYSE:EOG)’s strategy of focusing on internal growth rather than buying other companies makes it stand out in the energy industry. Melius Launches Coverage on EOG Resources (EOG), A ...

Key Takeaways EOG Resources says its shale project with ADNOC in the UAE is advancing on track.ADNOC is drilling horizontal wells and testing oil flow from a shale formation in the UAE.EOG has also partnered with Bapco Energies for shale gas exploration in Bahrain.EOG Resources (EOG) , a U.S.-based exploration and production firm, stated that its shale project with Abu Dhabi National Oil Company (“ADNOC”) is advancing in line with the schedule, without any delays. ADNOC is currently drilling horizontal well ...

Question-and-Answer SessionBut maybe to kick off the conversation. To start with a bigger question of EOG getting into Utica and you also made announcement in the Middle East. And a lot of investors are worried about the maturation of shale. And they will say, "Hey, EOG is doing these deals because the rest of the portfolio is maturing. What would be -- what would you say to that? Do you think that's the case for you EOG?Ezra YacobCEO & Chairman Yes. First of all, thank you for having us here. It looks like ...

Financial Data and Key Metrics Changes - The company reported over 12 billion barrels of oil equivalent resources with a 55% average direct after-tax rate of return at bottom cycle prices of $45 oil [12][13] - The Encino acquisition, valued at $5.6 billion, is expected to generate synergies of approximately $150 million in the first year, primarily through well cost reductions and infrastructure integration [3][18] Business Line Data and Key Metrics Changes - The Utica play is being positioned as a foundational asset, with plans to run five rigs and three frack fleets to deliver about 65 wells to sales [18] - The Delaware Basin continues to show growth potential, with nine additional landing zones developed over the past five years [26] Market Data and Key Metrics Changes - North American gas demand is projected to grow at a compound annual growth rate of 4% to 6%, driven by LNG demand and power generation needs [28][29] - The company has secured $900 million in marketing agreements for LNG, with plans to ramp up to this capacity by 2027 [34] Company Strategy and Development Direction - The company emphasizes capital discipline, operational excellence, and a commitment to sustainability as core pillars of its value proposition [5][6] - The focus is on organic exploration and leveraging technology to unlock new resources, with a strong emphasis on maintaining a multi-basin portfolio [15][41] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about the exploration plays in Bahrain and the UAE, with capital allocation dependent on incoming data from drilling activities [39][40] - The company views natural gas as a long-term energy solution, with a strategy to deliver low-cost gas consistently to meet growing demand [38] Other Important Information - The integration of the Encino acquisition has been progressing better than expected, utilizing technology and AI applications to streamline operations [24][22] - The company is not focused on further M&A but rather on optimizing existing assets and exploring new opportunities organically [21] Q&A Session Summary Question: Concerns about shale maturation and new deals - Management clarified that recent deals are not a reflection of shale maturation but rather a strategic move to leverage technological advancements and subsurface knowledge [2] Question: Capital allocation strategy - The company disaggregates individual assets based on their life cycle and allocates capital accordingly, balancing near-term returns with long-term growth [8][11] Question: Integration of the Encino deal - The integration is going well, with expected synergies and operational efficiencies being realized quickly [22][24] Question: Future growth of foundational plays - Management indicated that foundational plays like the Delaware and Eagle Ford will continue to grow alongside emerging assets like the Utica [25][26] Question: Balancing dry gas and oil investments - The company is strategically investing in both oil and gas, with a focus on maintaining low-cost gas supply while growing its oil business [30][31] Question: Marketing agreements and growth opportunities - Management emphasized the importance of securing the right marketing agreements and diversifying pricing indices to maximize revenue [34][35]

Financial Data and Key Metrics Changes - The company reported over 12 billion barrels of oil equivalent resources with a 55% average direct after-tax rate of return at bottom cycle prices of $45 oil and $2.50 gas [12][13] - The Encino acquisition, valued at $5.6 billion, is expected to generate synergies of approximately $150 million in the first year, primarily through well cost reductions and infrastructure integration [17][18] Business Line Data and Key Metrics Changes - The Delaware Basin continues to show significant growth potential, with nine additional landing zones developed in the past five years due to technological advancements and lower well costs [26] - The Eagle Ford has seen a level-loading of activity, maintaining margins despite a slowdown from pre-COVID investment levels [28] Market Data and Key Metrics Changes - North American gas demand is projected to grow at a compound annual growth rate of 4% to 6%, driven by LNG demand and power generation needs [29][30] - The company has secured $900 million in marketing agreements for LNG, with a ramp-up to full capacity expected by 2027 [35] Company Strategy and Development Direction - The company is focused on capital discipline, operational excellence, and leveraging technology to drive down well costs while maintaining a multi-basin portfolio [5][11] - The strategy includes balancing investments across foundational assets, emerging plays, and international exploration opportunities [14][41] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the integration of the Encino acquisition and its potential to accelerate the development of the Utica play [16][24] - The company remains committed to organic exploration and innovation as key differentiators in the competitive landscape [43][44] Other Important Information - The company is exploring opportunities in the Middle East, specifically in Bahrain and the UAE, with a focus on leveraging technology to enhance productivity and lower costs [41][42] Q&A Session Summary Question: Concerns about shale maturation and new deals - Management clarified that recent deals are not indicative of shale maturation but rather a strategic move to leverage technological advancements and subsurface knowledge [2][3] Question: Capital allocation strategy - The company emphasized the importance of disaggregating individual assets and investing at the right pace to balance near-term returns with long-term growth [8][10] Question: Future of foundational plays like Delaware and Eagle Ford - Management indicated that both foundational plays still have significant growth potential and will continue to contribute to the overall portfolio [25][26] Question: Balancing dry gas opportunities with oil investments - The company highlighted the strategic importance of low-cost gas supply from Dorado, while maintaining a balanced approach to oil and gas investments [30][32] Question: Marketing agreements and growth opportunities - Management discussed the importance of securing long-term marketing agreements for consistent gas supply, particularly in the LNG market [33][35]

Core Insights - Investors are encouraged to consider dividend-paying stocks for steady returns amid macroeconomic uncertainties [1] - Top Wall Street analysts provide recommendations to help identify attractive dividend-paying stocks [2] MPLX LP - MPLX LP is a diversified master limited partnership (MLP) focused on midstream energy infrastructure and logistics, recently acquiring Northwind Delaware Holdings LLC for approximately $2.38 billion [3] - The company reported distributable cash flow (DCF) of $1.4 billion for Q2, allowing for a capital return of $1.1 billion, with a current dividend yield of 7.5% [4] - Analyst Selman Akyol from Stifel reaffirmed a buy rating on MPLX, raising the price forecast to $60 from $57, citing growth potential from the Northwind acquisition [5][6] - Akyol expects MPLX to grow its distribution at 12.5% over the next several years, with a historical EBITDA and DCF growth rate of 7% over the past four years [6][7] EOG Resources - EOG Resources, an oil and gas exploration and production company, paid $528 million in dividends and repurchased $600 million in shares during Q2, with a quarterly dividend of $1.02 per share, yielding 3.4% [8] - Analyst Scott Hanold from RBC Capital reiterated a buy rating on EOG, setting a price target of $140, while TipRanks' AI Analyst has an "outperform" rating with a price target of $133 [9] - EOG is expanding its position in the Utica shale through the acquisition of Encino Acquisition Partners, with expectations of significant operational improvements [11] - Hanold anticipates EOG's natural gas exposure to exceed 3 billion cubic feet per day by the end of 2025, supported by its Dorado development and opportunities in the Utica [12][13] - EOG's strong balance sheet allows for high shareholder returns, with a commitment to increasing dividends despite macro uncertainties [14][15] Home Depot - Home Depot's Q2 adjusted earnings and revenue fell short of expectations, but the company maintained its full-year guidance, with a quarterly dividend of $2.30, yielding 2.2% [16] - Analyst Scot Ciccarelli from Truist reiterated a buy rating on Home Depot, raising the price forecast to $454 from $433, citing improving trends in core business categories [17][18] - Home Depot experienced broad sales growth across categories and geographies, with a 2.6% increase in big-ticket transactions over $1,000 in Q2 [19] - The company is less affected by tariff volatility compared to peers, attributed to its buying power and diversified sourcing model [20]

EOG Resources Conference Call Summary Company Overview - **Company**: EOG Resources - **Industry**: Exploration and Production (E&P) in the Oil and Gas sector - **Headquarters**: Houston, Texas - **Recent Activity**: Active in acquisitions, including the recent acquisition of Encino [1] Core Value Proposition - **Sustainable Value Creation**: EOG aims to create sustainable value through industry cycles, focusing on being among the highest return and lowest cost producers while maintaining strong environmental performance [2] - **Four Pillars**: 1. Capital Discipline 2. Operational Excellence 3. Sustainability 4. Culture [3] Capital Discipline - **Investment Focus**: EOG targets returns-focused investments at bottom cycle prices, defined as $45 WTI and $2.50 Henry Hub [4] - **Balance Sheet**: Maintains a pristine balance sheet and generates significant free cash flow [4] - **Dividend Policy**: EOG has paid a dividend for 27 years without cuts or suspensions, returning a minimum of 70% of annual free cash flow to investors [5] Operational Excellence - **Exploration Strategy**: Focus on organic exploration to maintain a low-cost, high-quality multi-basin inventory [6] - **Cost Control**: Utilizes in-house technical expertise and proprietary technology to enhance well performance and control costs [6] Sustainability Initiatives - **Environmental Focus**: EOG has set new emissions targets and emphasizes safe operations and community engagement [7] Company Culture - **Decentralized Decision-Making**: EOG's culture promotes local decision-making, allowing field teams to drive value creation [8] Financial Performance - **Q2 Results**: - Adjusted net income: $1.3 billion - Free cash flow: $1 billion - Increased regular dividend rate by 5% [12] - **2025 Guidance**: - CapEx: $6.3 billion (up 5% from previous guidance) - Full-year production: 521,000 BOE per day (up 9% year-over-year) [13] Recent Acquisitions - **Encino Acquisition**: - Added 1,100,000 net acres and 2+ billion BOE of undeveloped resources - Estimated $150 million in synergies within the first year [11][18] - **International Expansion**: - Acquired an onshore concession in the UAE for a 900,000-acre unconventional oil prospect [11] Asset Performance - **Foundational Assets**: - EOG identifies three foundational assets: Utica, Delaware Basin, and Eagle Ford, with competitive payback periods and well costs [19][20] - **Dorado Asset**: Positioned as the lowest cost dry gas play in North America with a breakeven price of $1.40 per MMBtu [22] Marketing Strategy - **Strategic Infrastructure**: Built gas processing plants and pipelines to enhance market access and price realizations [27][29] - **Price Realizations**: EOG's gas price realizations were $2.87 per MMBtu, nearly double that of peers [31] Dividend and Cash Returns - **Dividend Growth**: EOG has committed approximately $2.1 billion in cash to investors for the year, with a strong growth trajectory [32] - **Total Cash Return**: Over the past five years, EOG has returned $21 billion to shareholders [32] Environmental Goals - **Emission Targets**: Aiming to reduce greenhouse gas emissions intensity by 25% from 2019 levels by 2030, with a focus on zero methane emissions and routine flaring [33] Conclusion - **Investment Appeal**: EOG Resources presents a compelling investment opportunity due to its sustainable value creation strategy, strong financial performance, and commitment to environmental sustainability [33]

Financial Data and Key Metrics Changes - EOG Resources reported adjusted earnings per share of $2.32 and adjusted cash flow per share of $4.57 for Q2 2025, with free cash flow of $973 million during the quarter [15][17] - The company returned over $1.1 billion to shareholders through dividends and share repurchases, maintaining a commitment to return at least $3.5 billion in cash during 2025 [6][31] - A 5% increase in the regular dividend was announced, bringing the annual dividend rate to $4.8 per share, yielding 3.5% at current share prices [15][31] Business Line Data and Key Metrics Changes - Oil, natural gas, and NGL volumes exceeded guidance, with strong operational performance translating into financial results [5][20] - The company updated its 2025 CapEx guidance to $6.3 billion, with forecasted average oil production of 521,000 barrels per day and total production of 1.224 million barrels of oil equivalent per day [22][31] - The Utica asset is expected to contribute significantly to growth, with a focus on operational efficiencies and cost reductions [9][24] Market Data and Key Metrics Changes - The demand for natural gas is projected to grow at a compound annual growth rate of 4% to 6% through 2030, driven by LNG and power demand [12][13] - EOG is well-positioned to capture incremental gas demand with its Dorado asset and the newly acquired Utica dry gas volumes [13][48] - The company anticipates a balanced market for oil in 2026, with less non-OPEC supply growth and historically low inventory levels [64][65] Company Strategy and Development Direction - EOG's strategy focuses on capital discipline, operational excellence, sustainability, and culture, with a commitment to being among the highest return, lowest cost producers [11][32] - The integration of the nCino assets is expected to enhance returns and growth, with a target of $150 million in annual run rate synergies within the first year post-acquisition [23][32] - The company is exploring new opportunities in the UAE and expanding its presence in the Gulf States, leveraging its technical expertise [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's future, citing strong operational performance and a commitment to shareholder returns [6][31] - The outlook for oil demand is expected to moderate in 2025 before increasing in 2026, with a focus on maintaining a disciplined investment approach [11][64] - The recent tax legislation is projected to provide a recurring benefit of approximately $200 million annually, supporting free cash flow [59] Other Important Information - EOG has repurchased over 46 million shares since initiating buybacks in 2023, representing approximately 8% of shares outstanding [16] - The company has a pristine balance sheet, maintaining total debt levels versus EBITDA at roughly one time [76] Q&A Session Summary Question: Sustaining capital requirements for Utica production - Management indicated it is too early to provide specific sustaining capital requirements for the Utica, but operational efficiency gains are expected to contribute to lower costs [37][40] Question: Geological concept and commercial development in UAE - Management expressed excitement about the UAE concession, highlighting good geological data and the importance of infrastructure and logistics for scaling production [42][44] Question: Marketing strategy for gas market - Management emphasized a thoughtful approach to marketing agreements, focusing on good partners and premium pricing, particularly with the new gas assets [47][50] Question: Quick wins in Utica operations - Management identified several operational efficiencies and cost-saving opportunities in the Utica, including shared infrastructure and EOG technology [79][81] Question: Impact of high-frequency sensors on costs and EUR - Management noted that while it is early in the implementation of high-frequency sensors, they expect significant improvements in well performance and cost efficiency [84][86]

Core Viewpoint - EOG Resources, Inc. reported better-than-expected second-quarter 2025 results, with adjusted earnings per share of $2.32, surpassing estimates but down from $3.16 year-over-year. Total revenues of $5.48 billion also exceeded expectations but declined from the previous year's $6.03 billion [1][9]. Operational Performance - Total oil-equivalent production volumes increased by 8.3% year-over-year to 103.2 million barrels of oil equivalent (MMBoe), exceeding the company's guidance midpoint of 101.4 MMBoe [3]. - Crude oil and condensate production reached 504.2 thousand barrels per day (MBbls/d), up 2.8% from the prior year, and beat estimates [4]. - Natural gas volumes rose to 2,229 million cubic feet per day (MMcf/d), significantly higher than the previous year's 1,872 MMcf/d and also above estimates [4]. Price Realization - Average price realization for crude oil and condensates fell by 21.6% year-over-year to $64.82 per barrel, while natural gas prices improved by almost 66% to $2.96 per Mcf [5]. Operating Costs - Lease and well expenses increased to $396 million, while gathering, processing, and transportation costs rose to $455 million, both higher than the previous year [6]. - Total operating expenses were reported at $3.73 billion, down from $3.89 billion year-over-year [6]. Liquidity and Capital Expenditure - As of June 30, 2025, EOG had cash and cash equivalents of $5.2 billion and long-term debt of $3.5 billion, with free cash flow generated in the quarter amounting to $973 million [7]. - Capital expenditure for the quarter was $1.52 billion, with full-year expectations set between $6.2 billion and $6.4 billion [10]. Guidance - For 2025, EOG anticipates total production between 1,206.8 and 1,241.1 MBoe/d, with third-quarter production expected to be between 1,273.2 and 1,313.3 MBoe/d [10].

Financial Performance & Capital Allocation - EOG reported adjusted net income of $1.3 billion, resulting in adjusted EPS of $2.32 and adjusted CFPS of $4.57 for 2Q 2025[9] - The company generated $1.0 billion in free cash flow during 2Q 2025[9] - EOG increased its regular quarterly dividend rate by 5%[10] - The company returned $1.1 billion to shareholders, including $0.5 billion in regular dividends and $0.6 billion in share repurchases during 2Q 2025[10] - EOG is targeting approximately $4.3 billion in free cash flow for full-year 2025, based on $65 WTI and $3.50 HH[14] - The company has committed $3.5 billion of cash return year-to-date through regular dividends and share repurchases[14] - EOG's regular dividend represents a $2.1 billion cash return commitment for 2025[63] Operational Highlights & Strategic Initiatives - EOG acquired Encino, creating a premier Utica asset position totaling 1.1 million net acres[10] - The company was awarded an onshore concession in the UAE to explore and appraise approximately 900,000 acre unconventional oil prospect[10] - EOG's average total production is projected to be 1,224 MBOED for 2025[13,16] - The company's average oil production is projected to be 521 MBOD for 2025[13,16] - EOG estimates $150 million of synergies to be realized in the first year following the Encino acquisition[27] - EOG's Janus Gas Processing Plant has a capacity of 300 MMcfd and supports Permian operations[54] Environmental Targets - EOG is targeting a 25% reduction in GHG emissions intensity rate from 2019 levels by 2030[70] - The company aims to maintain near-zero methane emissions, at 0.20% or less[69] - EOG is committed to zero routine flaring[69]