Diamondback Energy (NASDAQ:FANG) reported better-than-expected results for the fourth quarter. After the Q4 results were announced, FANG stock gained over 1% in yesterday’s extended trading session.
Diamondback Energy is an independent oil and natural gas company that is focused on the acquisition and exploration of unconventional resources in the Permian Basin.
Q4 Earnings Snapshot
The company reported adjusted earnings of $4.74 per share in Q4, down 10.4% year-over-year. However, it came above the consensus estimate of $4.70. Meanwhile, net revenue increased 9.8% to $2.23 billion and surpassed the Street’s expectations of $2.16 billion.
During the quarter, production increased by 18% to 462.6 MBO (thousand barrels of oil equivalent) per day from 391.4 MBO/day in the year-ago quarter. It is worth mentioning that strong production volume helped offset the impact of declining prices to some extent.
Q1 and 2024 Outlook
In the first quarter of 2024, the company expects oil production to be in the range of 270 to 274 MBO/day. For the full year, FANG expects to report a total production of 458-466 MBO/day. Furthermore, the company said it aims to drill 265-285 gross wells in 2024.
Capital Deployment Activities
Diamondback increased its annual base dividend by 7% to $3.60 per share. For Q4, the company declared a base dividend of $0.90 per share and a variable cash dividend of $2.18 per share. Both dividends are payable on March 12, 2024, to shareholders of record on March 5, 2024.
It is worth mentioning that FANG stock has a dividend yield of 4.45% compared with the energy sector’s average of 3.75%.
Is FANG a Good Buy Now?
Overall, Wall Street analysts are currently optimistic about FANG stock with a Strong Buy consensus rating based on 16 Buys and three Holds. The average price target of $187.05 implies 5.1% upside potential. Shares of the company have gained 40% over the past year.
