We recently published a list of Dividend Challengers 2025: Top 25. In this article, we are going to take a look at where EOG Resources, Inc. (NYSE:EOG) stands against other dividend challenger stocks.
Dividend Challengers refers to US-listed companies that have raised their dividends every year for a minimum of five, and less than ten, consecutive years. These companies have demonstrated a relatively recent commitment to sharing profits with shareholders through dividends. Investors usually gravitate towards such firms because historically, dividend growers outperform the returns of the broader market. Moreover, most of these firms have a track record of exhibiting lower price volatility, which makes them favorable to those looking for stable income.
Investor interest in stocks with reliable dividend growth remains strong due to long-term investment potential. As a result, many of these financially sound firms become targets for investors looking to manage risk without sacrificing growth. The Fidelity Equity-Income Fund and the Fidelity Global Equity Income Fund portfolios, managed by Ramona Persaud, seek stable dividend-paying firms with attractive valuations. She pointed out that declining interest rates tend to make dividend stocks more appealing than bonds due to relatively attractive yields. Indeed, Persaud argued lower rates could foster a more broad-based rally for stocks beyond the market gains, which have been largely concentrated on a handful of large-cap growth names. Her focus is on well-performing firms with reliable cash flows and strong, growing dividends.
According to analysts, investors can adopt a strategy that balances both income and growth by focusing on dividend growers. Historically, they have shown less volatility and often outperformed the broader market, including benchmarks like the S&P Equal Weight Index. A report from Guggenheim found that between May 2005 and December 2024, companies that initiated or raised their dividends achieved an average annual return of 10.5%, compared to just 5.5% for those that reduced or suspended payouts. By contrast, the overall market averaged a 10.4% return during the same period, slightly lagging behind the dividend growers. The report also emphasized that dividend growth strategies tend to perform well across different market environments, both bullish and bearish. This makes them a compelling option for investors seeking long-term returns while aiming to protect their portfolios during downturns.
Bank of America also noted that dividend-paying stocks helped stabilize portfolios during the turbulent month of March. As trade policy uncertainty under President Donald Trump rattled markets, value and dividend-oriented names held up better. In an April 11 report, BofA’s quant strategist Nigel Tupper highlighted these trends and pointed to several top-performing dividend stocks during the market’s choppy period.
“In March, as global equities fell -4.1% on concerns tariffs could increase and slow growth, the best performing global styles were Value and Dividends.”
As investor interest in dividend-paying stocks continues to climb, many companies have responded by steadily boosting their payouts. According to a report from Janus Henderson, global dividend distributions hit a record $1.75 trillion in 2024, marking a 6.6% increase on an underlying basis. The total headline growth stood at 5.2%, slightly tempered by a decline in special one-time dividends and the impact of a stronger US dollar. Of the 49 countries tracked in the report, 17—including key markets like the US, Canada, France, Japan, and China—achieved new highs in dividend payments. Overall, 88% of companies either raised or maintained their dividends during the year. Looking ahead, Janus Henderson expects global dividend payouts to grow by 5.0% on a headline basis in the coming year, reaching another record of $1.83 trillion. Despite ongoing currency pressures from a strong dollar, the firm projects underlying growth to edge slightly higher to about 5.1%.
EOG Resources, Inc. (EOG): One of the Top Dividend Challengers in 2025
An oil rig in action in a vast desert, drilling for natural gas.
For this list, we looked at a group of dividend challengers, recognized for consistently increasing dividends for 5 consecutive years, but for less than 10 years. From this list, we chose companies with the highest dividend yields as of April 29 and arranged them in order from lowest to highest yield.
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Dividend Yield as of April 29: 3.45%
EOG Resources, Inc. (NYSE:EOG) is a Texas-based energy company that is engaged in the exploration of hydrocarbons. While the company does hold assets in Australia and the Caribbean, the bulk of EOG’s oil production comes from its US operations, particularly in the Rocky Mountains, the Permian Basin, and South Texas. Its significant inventory of undeveloped resources is expected to support ongoing production in the future.
One of the most attractive features of EOG Resources, Inc. (NYSE:EOG) is its strong and well-managed balance sheet. In the first quarter of 2025, the company posted an operating cash flow of $2.2 billion. It ended the quarter with $6.6 billion available in cash and cash equivalents, compared with $5.3 billion in the prior-year period. In addition, it generated $1.3 billion in free cash flow, which also showed growth from $1.2 billion in Q1 2024.
EOG Resources, Inc. (NYSE:EOG) reported cash operating costs of $10.31 per barrel of oil equivalent per day (boe/d) and total production of 1,090 thousand boe/d. In the first quarter of 2025, the company spent approximately $800 million on share buybacks, returning 98% of its available free cash flow to shareholders. For the year, management trimmed its capital spending budget by $200 million, bringing it down to $6 billion.
On May 1, EOG Resources, Inc. (NYSE:EOG) declared a quarterly dividend of $0.975 per share, which was in line with its previous dividend. Overall, the company has been raising its payouts for nine consecutive years. In addition, it also has a history of paying special dividends to shareholders, which makes EOG one of the best dividend stocks on our dividend challengers list. The stock supports a dividend yield of 3.45%, as of April 29.
Overall, EOG ranks 9th on our dividend challengers list. While we acknowledge the potential of EOG as an investment, our conviction lies in the belief that some deeply undervalued dividend stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued dividend stock that is more promising than EOG but that trades at 10 times its earnings and grows its earnings at double digit rates annually, check out our report about the dirt cheap dividend stock.
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Disclosure: None. This article is originally published at Insider Monkey.
