Sabine Royalty Trust: 8.3%-Yielding Stock Hikes Monthly Payout 180%
January 11, 2022
Sabine Royalty Stock a Top Monthly Ultra-High Yielder
What’s better than finding a great stock with reliable, ultra-high-yielding, quarterly dividends? Finding a great, bullish stock with reliable, ultra-high-yielding, growing, monthly dividends.
Sabine Royalty Trust (NYSE:SBR) fits that bill perfectly. SBR stock is one of the best monthly-paying high-yield dividend stocks going.
Sabine Royalty is an oil and gas trust that has royalty and mineral interests in producing and undeveloped oil and gas properties in Florida, Louisiana, Mississippi, New Mexico, Oklahoma, and Texas. (Source: “About Us,” Sabine Royalty Trust, last accessed January 10, 2022.)
As a trust, it has no capital expenses; the company isn’t exploring for, nor investing in, new wells. It just pumps out oil and gas and passes the earnings on to investors. It’s as simple as that.
That said, the trust’s estimated net proven reserves are approximately 6.3 billion barrels of oil and 39.8 billion cubic feet of gas. The reserves have a future net value of $229.4 million and a life span of nine to 12 years. (Source: “Sabine Royalty Trust Announces Monthly Cash Distribution for April 2021 and 2021 Reserve Quantities,” Sabine Royalty Trust, April 5, 2021.)
Those figures will change, of course, but maybe not in the way you think. Sabine Royalty updates its reserves every year, and interestingly, instead of its proven developed reserves of oil and gas getting lower, they’ve been increasing.
SBR Stock Has Surpassed its Pre-Pandemic Price
As you can see in the chart below, Sabine Royalty stock took a hit during the coronavirus-fueled sell-off in March 2020, tumbling by roughly 40%. Since then, Sabine Royalty Trust’s share price has been trending steadily upward, juiced by higher oil and gas prices and the company’s increased production.
As of this writing, SBR stock is up by:
- 16% month-over-month
- 23% over the last six months
- 77% year-over-year
- 130% since bottoming in March 2020
Chart courtesy of StockCharts.com
Sabine Royalty Trust’s Monthly Dividend More Than Doubles
As you can see in the above chart, Sabine Royalty stock’s price rocketed significantly in the opening days of January. Investor enthusiasm was buoyed by a 180% increase in the company’s monthly payout. (Source: “Sabine Royalty Trust Announces Monthly Cash Distribution For January 2022,” Sabine Royalty Trust, January 7, 2022.)
On January 7, 2022, Sabine Royalty declared a cash distribution for the month of $0.87681 per unit, an eyewatering 180% increase over the December 2021 distribution of $0.31265.
The huge jump reflects a $4.1-million contribution from two new producing horizontal wells, higher natural gas prices and production in September 2021, and higher oil prices and production in October 2021.
Sabine Royalty Trust’s eight new producing gas wells averaged about 1.3 million cubic feet per day, totaling over 1.1 billion cubic feet during the reporting period, with an average price of $3.74 per thousand cubic feet.
Because the company operates in the oil and gas industry, it’s not surprising that SBR stock’s payouts can fluctuate. That’s because Sabine Royalty Trust’s dividends are tied to the price of oil and natural gas.
What should be encouraging to investors is that, even during the March 2020 stock market crash, Sabine Royalty stock’s dividend remained pretty solid.
During a period when oil and gas prices plummeted—and many oil and gas companies were posting losses and slashing their distributions—Sabine Royalty Trust was able to increase its energy production and continue providing investors with reliable, high-yield, monthly dividends.
|
Year |
Distribution per Unit |
|
2021 |
$3.22 |
|
2020 |
$2.40 |
|
2019 |
$3.02 |
|
2018 |
$3.35 |
|
2017 |
$2.37 |
(Source: “Cash Distributions,” Sabine Royalty Trust, last accessed January 10, 2022.)
The Lowdown on Sabine Royalty Stock
Sabine Royalty Trust is an overlooked oil and gas play with reliable, ultra-high-yield monthly dividends. SBR stock’s price has recovered from the March 2020 crash, and its monthly payouts have been rising. In fact, in early January, the company announced a 180% hike in its monthly distribution. If a global recession couldn’t derail Sabine Royalty stock’s monthly payout, what could?
And the outlook for Sabine Royalty is strong. Oil and natural gas prices have recovered from their pre-pandemic levels, and the global economy has been picking up steam.
