Dorchester Stock: 11%-Yielder That’s Paid a Distribution Since 1982
June 9, 2025
Outlook for Dorchester Minerals LP Remains Robust
West Texas Intermediate (WTI) crude oil has taken a temporary hit on slower demand caused by the current economic global uncertainty. Oil prices are also bearish on renewed optimism about a U.S.-Iran nuclear agreement, which would likely result in Iranian oil hitting global markets.
Still, the longer-term outlook for crude remains bullish with the Organization of the Petroleum Exporting Countries (OPEC) and other organizations projecting that crude oil demand will remain strong through 2050. By 2050, the global population is expected to grow by nearly two billion people, or 20%, as gross domestic product (GDP) doubles. Over this time, global energy demand should grow by 15%. (Source: “ExxonMobil Global Outlook: Our view to 2050,” ExxonMobil, last accessed June 4, 2025.)
While the longer-term outlook doesn’t necessarily help out crude oil bulls right now, it does show that oil will continue to be in demand for decades to come, and companies with the most established oil and gas properties, reserves, and blue-chip customers should continue to do well. This includes companies like Dorchester Minerals LP (NASDAQ:DMLP), an oil and gas exploration and production (E&P) company.
The company was formed in January 2003 with the combination of Dorchester Hugoton, Ltd., Republic Royalty Company, L.P., and Spinnaker Royalty Company, L.P.
Dorchester Minerals owns producing and non-producing crude oil and natural gas mineral, royalty, overriding royalty, net profits, and leasehold interests across 28 states. (Source: “Investor Relations,” Dorchester Minerals LP, last accessed June 4, 2025.)
The partnership’s independent engineering consultant has estimated that it has 17 million barrels of oil equivalent in total proved oil and gas reserves. Approximately 86% of these reserves are attributable to Dorchester Minerals’ royalty properties and 14% are attributable to its net profits interest. (Source: “Dorchester Minerals, L.P. Announces 2024 Results,” Dorchester Minerals LP, February 20, 2025.)
Since 2020, the partnership’s oil production has increased by six percent, gas production is up 32%, and natural gas liquid production is up 119%. (Source: “Investor Presentation,” Dorchester Minerals LP, May 14, 2025.)
Some of Dorchester’s biggest customers include ExxonMobile Corp (NYSE:XOM), Diamondback Energy Inc (NASDAQ:FANG), and ConocoPhillips (NYSE:COP).
Solid First-Quarter Results
Coming out of the 2020 health crisis, Dorchester Minerals delivered strong revenue growth of 93.4% in 2021 and 82.8% in 2022, before retracing a modest 4.1% in 2023. Lower energy prices in 2024 saw its revenue drop slightly for a second straight year to $161.5 million. (Source: “Dorchester Minerals, L.P. ,” MarketWatch, last accessed June 4, 2025.)
Again, coming out of the 2020 health crisis, Dorchester has been posting solid earnings, with income jumping 217% in 2021 to $1.94 per share before climbing 73.2% in 2022 to $3.35 per share. Lower commodity prices saw earnings slip to $2.85 per share in 2023 and $2.13 per share in 2024.
Despite lower commodity prices, Dorchester Minerals continues to report solid quarterly results. For the first quarter ended March 31, the company announced that total revenue climbed 39% to $43.1 million. Net income slipped 2.8% to $17.6 million, or $0.36 per share. (Source: “Dorchester Minerals, L.P. Announces First Quarter Results,” Dorchester Minerals LP, May 8, 2025.)
Dorchester Stock: Q1 $0.72/Unit Distribution Declared
Dorchester Minerals also has a history of reporting reliable free cash flow over the years. This is important since this is where distributions come from. It reported the three highest years on record in 2022 ($147.1 million), 2023 ($139.8 million), and 2024 ($132.6 million). (Source: “Dorchester Minerals, L.P. (DMLP),” Yahoo! Finance, last accessed June 4, 2025.)
This reliable cash flow has helped Dorchester pay an annual dividend every year since 1982. While its payout is reliable, the distribution fluctuates because it’s based on earnings. In the first quarter of 2025, Dorchester stock paid out $0.725 per unit, or $3.16 per share, for a forward annual yield of 11.34%.
For comparison’s sake, Dorchester stock paid out $0.739 in the fourth quarter of 2024, $0.995 in the third quarter of the year, and $0.702 in the second quarter of 2024. (Source: “Distribution History,” Dorchester Minerals LP, last accessed June 4, 2025.)
That reliable dividend payout could help investors ride out near-term volatility in the energy sector, which has a material impact on share price. Which is what’s happening right now. DMLP units hit a record high of $34.06 in January, but have traded lower since then to near $27.75 per unit.
Chart courtesy of StockCharts.com
The Lowdown on Dorchester Stock
Dorchester Minerals is an oil and gas E&P partnership that has been reporting consistently solid financial results and paying out a reliable high-yield distribution. And the longer-term outlooks for the company, Dorchester stock, and distribution remain robust, too.
That’s good news for the 156 institutions that hold 28.74% of all outstanding shares. The biggest holder of Dorchester stock is Morgan Stanley (NYSE:MS), with 1.02 million shares, or 2.16% of all outstanding shares. (Source: “Dorchester Minerals, L.P. (DMLP),” Yahoo! Finance, last accessed June 4, 2025.)
