Investors can definitely still find high-yield dividend stocks that are worth buying and holding forever. While some returns might be on the lower side, the beauty of these stocks is in the stability and consistent payouts. It’s a bit like planting a tree. The growth is slow and steady, but it offers long-term rewards that keep giving back over time. So, even if the returns don’t shoot to the moon, these stocks can still be solid picks for the patient investor, especially this stock on the TSX today.
Image source: Getty Images
PHX Energy
PHX Energy Services (TSX: PHX) is a Canadian energy services company that provides specialized directional drilling services to oil and natural gas companies. With its advanced technology and expertise, PHX Energy helps clients optimize well-bore placement. This can enhance production and reduce costs. The company operates in key energy markets across North America and internationally, ensuring that it can serve a diverse range of projects. One of the standout features of PHX Energy is its focus on innovation, with a portfolio of high-tech equipment and software designed to improve drilling efficiency and precision.
In terms of investment potential, PHX Energy has demonstrated resilience in a volatile industry. The energy sector can be unpredictable. Yet PHX Energy has managed to maintain a solid position thanks to its specialized offerings and ability to adapt to changing market conditions. For investors interested in energy services with a technical edge, PHX Energy could be a compelling option.
Into earnings
PHX Energy’s second-quarter 2024 earnings highlight a steady performance, with consolidated revenue of $154.2 million. Just shy of the $155.6 million from the same period in 2023. The company saw strong results in its Canadian division. This achieved a record $38.2 million in quarterly revenue, up 25% year over year. This growth helped balance the softer performance in the U.S., where revenues dropped by 7% amid a decline in the U.S. rig count. Despite challenges, PHX Energy’s premium technologies and strong market presence kept its U.S. division resilient.
On the financial front, the company reported adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $30 million. Down from $34.8 million in the same quarter last year. Earnings were also lower at $12.9 million, or $0.26 per share, compared to $18.1 million, or $0.35 per share, in 2023. However, PHX Energy maintained its commitment to shareholders, increasing dividend payments by 24% and repurchasing over 358,000 shares. Looking ahead, the company remains cautiously optimistic. Particularly in the U.S., as it continues to focus on its strategic growth initiatives in both Canadian and international markets.
Future focus
Looking ahead, investors in PHX Energy should keep an eye on a few key factors. First, the company’s renewed normal course issuer bid (NCIB) will allow it to repurchase up to 3.36 million shares. This could drive value for shareholders by reducing the number of outstanding shares. The share-buyback plan, along with the company’s Return of Capital Strategy (ROCS), demonstrates PHX Energy’s commitment to rewarding its investors, especially in a volatile market environment. Watching how these share repurchases impact stock performance and earnings per share will be crucial for long-term investors.
Additionally, PHX Energy’s dividend strategy remains a strong point of interest. With a forward annual dividend yield of nearly 9%, the company continues to deliver solid income opportunities. Investors should monitor the sustainability of this dividend, particularly as market conditions evolve and capital expenditures fluctuate. PHX Energy’s focus on efficient capital allocation will be key to maintaining its dividend and potentially increasing returns for shareholders over time.
