Archrock Boosts Dividend Payout, Reflecting Strong Performance

Archrock, Inc. (NYSE: AROC), a leading energy infrastructure company, has announced an increase in its quarterly cash dividend. The new dividend, declared on January 30, 2025, amounts to $0.19 per share, representing a 9% increase from the previous quarter's dividend of $0.175. This marks the fifth consecutive quarterly dividend increase for Archrock, reflecting the company's strong financial performance and commitment to returning capital to shareholders.



The increase in Archrock's dividend payout is a testament to the company's robust fundamentals and the strength of its natural gas compression business. Archrock's high utilization rates, efficient operations, and strategic investments in its fleet have driven earnings growth and generated significant free cash flow. The company's ability to consistently increase dividends while maintaining prudent financial health is a result of its disciplined capital allocation and commitment to maintaining a strong balance sheet.



Archrock's dividend growth trajectory has been impressive, with the current dividend yield of approximately 2.53% being higher than its historical average of around 2.34%. This indicates that Archrock's dividend has been growing over time, providing shareholders with a steady stream of income and capital appreciation. The company's commitment to increasing cash returns to shareholders, while maintaining prudent dividend coverage and leverage ratios, has contributed to this trend.



Archrock's dividend coverage ratio and leverage ratio align with its commitment to maintaining prudent financial health while increasing cash returns to shareholders. The company has consistently aimed to achieve a dividend coverage ratio of well above 2.0 times and a leverage ratio of between 3.0 and 3.5 times. In 2023, Archrock achieved a dividend coverage ratio of 2.8x and a leverage ratio of 3.5x, demonstrating its ability to balance the interests of both shareholders and creditors.

In conclusion, Archrock's increase in its quarterly cash dividend reflects the company's strong financial performance and commitment to returning capital to shareholders. The company's disciplined capital allocation, strategic investments, and robust fundamentals have enabled it to consistently increase dividends while maintaining prudent financial health. As Archrock continues to execute on its growth strategy, investors can expect the company to continue delivering strong results and increasing shareholder value.