One of the highest dividend challengers in 2025

We recently released a list Dividend Challenger 2025: Top 25. In this article, we will explore EOG Resources, Inc. (NYSE:EOG) Position with other dividend challenger stocks.

Dividend Challenger refers to U.S. listed companies that are at least five and less than ten years a year. These companies have shown relatively new commitments to share profits with shareholders through dividends. Investors tend to favor such companies because historically, dividend growers have performed better than the returns of the broader market. Furthermore, most of these companies have records showing lower price volatility, which makes them favorable to those seeking stable income.

Investors’ interest in stocks with reliable dividend growth remains strong due to long-term investment potential. As a result, many of these economically sound companies become targets for investors who want to manage risk without sacrificing growth. The Fidelity Equity Income Fund and Fidelity Global Equity Income Fund portfolio managed by Ramona Persaud seek stable dividend paying companies with attractive valuations. She noted that lower interest rates tend to make dividend stocks more attractive due to relatively attractive returns. Indeed, Persaud believes that lower interest rates can promote a wider gathering for stocks beyond market earnings, which are concentrated primarily on a few large growth names. Her focus is on outstanding companies with reliable cash flows and strong and growing dividends.

According to analysts, investors can balance income and growth strategies by focusing on dividend growers. Historically, they have shown less volatility and often surpassed the broader market, including benchmarks like the S&P Equal Weight Index. A Guggenheim report found that between May 2005 and December 2024, the average annual rate of return of companies that initiated or raised dividends was 10.5%, while only 5.5% of companies that reduced or suspended spending. By comparison, the overall market average return rate for the same period was 10.4%, slightly behind dividend growers. The report also highlights that dividend growth strategies tend to perform well in different market environments that are bullish and bearish. For investors seeking long-term returns, their goal is to protect their portfolio during a downturn, making them a compelling choice.

Bank of America also noted that dividend payments stocks helped stabilize the portfolio during the turbulent month of March. Trade policy uncertainty under President Donald Trump is shaking, with value and dividend-oriented names getting better. In its April 11 report, BOFA's Quant Strategist Nigel Tupper highlighted these trends and pointed out several of the best-performing dividend stocks during the volatile period in the market.

“In March, global stocks fell by -4.1% as the focus on tariffs could increase and slow growth, with the best global styles in the world being value and dividends.”

As investors' interest in dividend-paying stocks continues to climb, many companies respond by steadily increasing their spending. According to a report by Janus Henderson, global dividend distribution hit a record $1.7.5 trillion in 2024, marking a 6.6% increase in the base. The overall title growth rate was 5.2%, slightly suppressed due to the special one-time dividend decline and the higher dollar impact. Of the 49 countries tracked in the report, 17 (including the United States, Canada, France, Japan and China) have major markets that occupy new highs in dividend payments. Overall, 88% of companies are raising or maintaining their dividends during the year. Looking ahead, Janus Henderson expects global dividend spending to grow 5.0% on the title in the coming year and hit another record of $1.83 trillion. Despite continued pressure on the currency's strong dollar, the company's project growth has dropped to about 5.1%.

EOG Resources, Inc. (EOG): One of the top dividend challengers in 2025

Oil drilling rigs taking action in the vast desert to drill for natural gas.

For this list, we study a group of dividend challengers who have continued to increase their dividends for 5 consecutive years, but have lasted less than 10 years. From this list, we selected the companies with the highest dividend yield as of April 29 and arranged dividends at the lowest to the highest yield.

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As of April 29: 3.45% dividend yield

EOG Resources, Inc. (NYSE:EOG) is a Texas-based energy company that is exploring hydrocarbons. While the company does hold assets in Australia and the Caribbean, most of EOG's oil production comes from its U.S. operations, especially in the Rockies, Permian Basin and South Texas. It is expected that its important list of underdeveloped resources will support continued production in the future.

EOG Resources, Inc. (NYSE:EOG) One of the most attractive features is its powerful and managed balance sheet. In the first quarter of 2025, the company's cash flow was $2.2 billion. It ended with $6.6 billion in cash and cash equivalents, up from $5.3 billion in the previous year. In addition, it generated $1.3 billion in free cash flow, which also showed a $1.2 billion increase in the first quarter of 2024.

EOG Resources, Inc. (NYSE:EOG) reported cash operating costs of $10.31 per barrel per day oil volume (BOE/d) and total output of 109,000 BOE/d. In the first quarter of 2025, the company spent about $800 million in stock buybacks, returning 98% of its available free cash flow to shareholders. During the year, management reduced its capital expenditure budget by $200 million, bringing it to $6 billion.

May 1, EOG Resources, Inc. (NYSE:EOG) announced a quarterly dividend of $0.975 per share, consistent with the previous dividend. Overall, the company has been increasing spending for nine consecutive years. Additionally, it has a history of paying special dividends to shareholders, which makes EOG one of the best dividend stocks on our dividend challenger list. As of April 29, the stock's dividend yield was 3.45%.

Overall, EOG Ranked 9 On our dividend challenger list. Although we acknowledge that the potential of EOG is an investment, our belief lies in the belief that certain undervalued dividend stocks have greater hope to provide higher returns and perform within a shorter time frame. If you are looking for an undervalued dividend stock that is more promising than EOG, but earns 10 times annually and grows in double-digit revenue each year, check out our report Dirt cheap dividend stocks.

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Disclosure: None. This article was originally published in Inside monkey.