Halliburton Company (HAL) will cut its dividend by 75.0 percent to $0.045 per share quarterly in 2020. The oil services company had last raised its quarterly dividend by 20.0 percent to $0.18 per share in 2014 and this is the first dividend cut in decades by HAL.
The next dividend of 4.5 cents per share will be paid on June 24, 2020 to shareholders of record on June 3, 2020. A new annual dividend rate of 18 cents yields 1.6% at a stock price of $11.59.
In a press release dated May 20, 2020 Halliburton explains the dividend cut, stating that he decision to set the quarterly dividend at a lower level reflects the current market conditions and uncertainties regarding the depth and duration of this downturn. “Halliburton continues to take measures to strengthen our liquidity and financial resilience under the current circumstances. We implemented a $1 billion action plan to reduce overhead and other costs, lowered capital expenditures roughly 50 percent from 2019 levels and accelerated the implementation of our North American service delivery improvement strategy,” said Jeff Miller, Halliburton chairman, president and chief executive officer in the press release. “Today’s dividend announcement reflects our commitment in the near term to deliver shareholder returns while maintaining a strong liquidity position. The dividend supports our shareholder value proposition by maintaining a reasonable payout as we navigate these uncertain times. More importantly, it places the Company in a strong position, financially and structurally, to take advantage of the market’s eventual recovery.”
Because of the dividend cut Halliburton's annual dividend payment to shareholders will drop from $632 million to $158 million. The company didn't hike its dividend the last couple of years and didn't do buybacks with the number of shares outstanding rising gradually over the last couple of years.
Halliburton Company is one of the world's largest providers of products and services to the energy industry. Halliburton's customers are the world's major, national and independent oil and gas producers. The company's activities include locating hydrocarbons and managing geological data, drilling and formation evaluation, well construction and completion and optimizing production. Halliburton operates under two divisions: the Completion and Production segment and the Drilling and Evaluation segment. The predecessor of Halliburton was established in 1919 and incorporated under the laws of the State of Delaware in 1924. The company has paid a dividend to shareholders since at least 1972.