How does the quarterly cash dividend compare to the company's historical payout ratios and dividend policy?
Short answer:
The press release you provided tells us that Granite Ridge Resources, Inc. (GRNT) declared a quarterly cash dividend in its Q2‑2025 earnings announcement, but it does not disclose either the amount of the dividend or any details of the company’s historical payout ratios or formal dividend policy. Because those key pieces of information are missing, a direct, data‑driven comparison cannot be made from the information in the news release alone.
1. What the release does tell us
| Item | Detail from the release |
|---|---|
| Quarter | Q2 2025 (ended June 30 2025) |
| Production | 31,576 Boe/d (↑ 37% YoY) |
| Net income | $25.1 M ($0.19/sh) vs $5.1 M ($0.04/sh) YoY |
| Dividend | “Declares Quarterly Cash Dividend” – no amount or per‑share figure disclosed |
| Outlook | Updated 2025 outlook (not reproduced here) |
Because the announcement does not list the dividend per share, the dividend yield, or any historical dividend amounts, we cannot calculate:
- Payout ratio ( dividend / earnings per share ) for this quarter, nor
- Change in payout ratio versus prior quarters or prior years.
2. What we would need to do a proper comparison
| Data point | Why it matters | Typical source |
|---|---|---|
| Dividend amount (per share or total cash) | Needed to compute the actual payout amount and, together with earnings per share (EPS), the payout ratio (Dividend / EPS). | The same press release, a separate press release, or the company’s “Dividends” section on its investor‑relations site. |
| Historical dividend amounts (e.g., Q1‑2025, Q4‑2024, etc.) | Allows calculation of historical payout ratios and the trend (e.g., rising, stable, or declining). | Prior earnings releases, SEC Form 10‑K/10‑Q dividend tables, or a dividend history database (e.g., Dividend.com, Bloomberg). |
| Company’s dividend policy statement | Shows whether the company targets a specific payout‑ratio range (e.g., “pay 30–40% of earnings”) or a “share‑holder return” framework. | Investor‑relations page, “Capital Allocation” section in annual report, or “Letter to Shareholders”. |
| Share price (for dividend yield) | Yield = dividend per share / share price. Useful for comparing to peers. | Market data (Yahoo! Finance, Bloomberg, etc.). |
How the calculation works (once the numbers are known):
- Find EPS for the period – The release says $0.19 per diluted share net income for Q2 2025.
- Take the declared dividend per share (e.g., $0.05 per share).
- Payout Ratio = (Dividend per share ÷ EPS) × 100.
Example: If the dividend were $0.05, the payout ratio = ($0.05 ÷ $0.19) ≈ 26 %. - Compare that ratio to prior quarters (e.g., Q1‑2025, Q2‑2024) to see if the payout is increasing, staying flat, or decreasing.
3. How to locate the missing information
- Official press release – Look for a supplemental “Dividend Announcement” that usually follows an earnings release. Companies often file a separate “Dividend Announcement” under the “Events” tab of the SEC’s EDGAR system (Form 8‑K).
- Investor Relations website – Check the “Dividends” or “Capital Allocation” page for a table of past dividends.
- SEC filings – The company’s Form 10‑Q (quarterly) and Form 10‑K (annual) include a “Dividends” section with the amount and any policy statements.
- Third‑party data providers – Bloomberg, Refinitiv, S&P Capital IQ, or the “Dividends” tab on Yahoo! Finance list historical dividend amounts and payout ratios for public companies.
4. What we can infer (cautiously) from the limited data
- Earnings have risen dramatically – Net income grew five‑fold YoY, and EPS jumped from $0.04 to $0.19. This strong earnings growth often creates capacity for a higher payout if the board chooses to increase dividends.
- Production growth (37% increase in daily Boe) suggests strong cash‑flow generation that could support a larger dividend.
- No explicit dividend policy was quoted, which may indicate that Granite Ridge does not have a formal, publicly‑stated payout‑ratio target (common for many upstream exploration‑production firms that prefer to retain cash for growth, debt reduction, or capital expenditures).
Thus, if the dividend announced is modest (e.g., $0.02–$0.05 per share), the payout ratio would likely remain below 30% of Q2 earnings, which would be consistent with an “conservative” approach typical for a growth‑oriented, upstream company. Conversely, a larger payout (e.g., $0.10 per share) would represent a ≈ 53% payout and would signal a shift toward returning more cash to shareholders.
Without the exact dividend amount and historic payout data, we cannot definitively place the current dividend in the context of historical ratios or the company’s stated policy.
5. Bottom‑line recommendation
- Locate the exact dividend amount (e.g., $0.04 per share) from the company’s official “Dividend Announcement” or the Q2 2025 Form 8‑K.
- Gather historic dividend data for at least the previous three years (or five quarters) from the investor‑relations page or EDGAR.
- Calculate the payout ratio for each period using the EPS figures disclosed in the earnings releases (e.g., $0.19 EPS for Q2 2025).
- Compare the current ratio to the historic average and to any explicit policy (e.g., “target 30‑40% payout of net earnings”).
Once you have those numbers, you can precisely answer:
“Granite Ridge’s Q2 2025 cash dividend of X per share represents a Y% payout of earnings, which is higher/lower/similar to the company’s average payout of Z% over the past N years and aligns (or does not align) with the stated policy of [policy].”
If you need help locating the dividend announcement or extracting the data from SEC filings, let me know and I can walk you through the exact steps or provide a short script to pull it from the SEC’s API.