Tourmaline Oil's 47% CAGR: A Tale of Dividends, Acquisitions, and Growth
Sunday, Jan 19, 2025 8:08 am ET
2min read 
Tourmaline Oil (TSE:TOU) shareholders have earned a 47% compound annual growth rate (CAGR) over the last five years, a testament to the company's strong performance and commitment to shareholder returns. This impressive growth can be attributed to several key factors, including the company's dividend policy, strategic acquisitions, and consistent financial performance.
Tourmaline Oil's dividend policy has played a significant role in its shareholder returns. The company has consistently increased its dividend payments, providing shareholders with a steady income stream and contributing to the company's overall growth. In 2018, Tourmaline Oil paid its first regular quarterly dividend of $0.08 per share. Since then, the company has increased its dividend, with the most recent payment in 2024 being $0.35 per share. This represents a significant increase from the initial dividend payment and demonstrates the company's commitment to returning value to shareholders through dividends.
In addition to its regular quarterly dividends, Tourmaline Oil has also declared special dividends on several occasions. For example, in 2022, the company declared a special dividend of $2.25 per share, which was paid in addition to the regular quarterly dividend. This special dividend was a result of the company's strong financial performance and its desire to return excess cash to shareholders.
Acquisitions have also played a significant role in Tourmaline Oil's growth. In August 2024, Tourmaline Oil announced the acquisition of Crew Energy Inc. (TSX:CR) from Equinox Partners LP for CAD 1.1 billion. This acquisition provided Tourmaline with access to Crew's significant natural gas reserves and infrastructure, which helped to increase the company's overall production and cash flow. Additionally, in November 2023, Tourmaline Oil completed the acquisition of Bonavista Energy Corporation, which further expanded the company's operations and increased its production capacity. These acquisitions have helped Tourmaline Oil to become one of the largest natural gas producers in Canada, with 75 years of reserves.
Tourmaline Oil's financial performance has also contributed to its overall growth. In 2023, the company's revenue was CAD 4.84 billion, a decrease of -31.82% compared to the previous year's CAD 7.10 billion. However, earnings were CAD 1.74 billion, a decrease of -61.31%. Despite the decrease in revenue and earnings, the company's financial performance has likely contributed to its overall growth.
In conclusion, Tourmaline Oil's 47% CAGR over the last five years can be attributed to several key factors, including its dividend policy, strategic acquisitions, and consistent financial performance. The company's commitment to returning value to shareholders through dividends, as well as its ability to expand its operations through acquisitions, has contributed to its overall growth and shareholder returns. As Tourmaline Oil continues to execute on its strategic plan, investors can expect the company to continue to deliver strong performance and shareholder returns.
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