W&T Offshore, Inc. (WTI) is another oil and gas name that is reaping the rewards of higher oil prices. The company offers both growth and income. On the income side, the company declared a regular cash dividend of $0.03 per share in early May. The dividend translates into a yield of 0.2%, which is a competitive yield within W&T Offshore’s industry as most oil and gas players pay no dividend.
W&T Offshore is an independent oil and natural gas acquisition, exploitation and exploration company. The company is focused primarily in the Gulf of Mexico area, where it has developed significant technical expertise and where the high production rates associated with hydrocarbon deposits have historically provided WTI the best opportunity to achieve a rapid payback on its invested capital.
The company declared a regular cash dividend of $0.03 per share in early May. WTI noted that the dividend is payable on July 1, 2008 to shareholders of record on May 20, 2008. The dividend translates into a yield of 0.2%, which is a competitive yield within W&T Offshore’s industry as most oil and gas players pay no dividend.
Also, in early May, WTI posted record results for the first quarter. Revenues came in 45% ahead of the year-ago result, achieving a record $356.5 million. Adjusted earnings per share surged by 279% year-over-year to an all time record of $1.10.
Chairman and Chief Executive Officer Tracy W. Krohn said, "We are very pleased with our financial and operating results. As our numbers suggest, we are truly benefiting from higher commodity prices.”
Krohn continued, stating that so far this year, its exploration drilling program has been 100% successful. The company believes that its continued level of high success is further evidence that the Gulf of Mexico continues to be a basin with above average exploration success rates for W&T.
W&T Offshore offers a solid return on equity [ROE] of 20%, which crushes the industry average of 8%. The company’s net margin of 17.2% is also well above the industry average of 6.2% WTI’s earnings per share are expected to grow by 30% over the next 3 – 5 years, which doubles the industry average projection of 15%.
Wall Street is bullish on W&T’s prospects. Three out of nine covering analysts hiked full-year 2008 earnings estimates from last month’s $4.71 per share to $5.23. The most accurate projection is even higher at $5.85 per share.