Investors in most of Australia's oil and gas companies have had a rough 12 months. The reason why I say most however, is because Woodside Petroleum Limited (ASX: WPL) has escaped relatively unscathed so far (compared to competitors like Santos Ltd (ASX: STO) and Origin Energy Ltd (ASX: ORG)).
Over the last 12 months, Woodside's share price has retreated only 22%, compared to over 30% for Origin and 55% for Santos. The reason? I believe it's because smaller investors haven't yet realised the impact that the lower oil price will have on Woodside's profit.
One Key Statistic
Woodside's financial year ends on December 31 and therefore it will deliver its half-year results on Wednesday. Woodside's oil-linked gas contracts are typically priced at a 6-month delay to the oil price, so last year's plunge in the oil price will only start to be seen in this week's results.
Of most importance to Woodside's investors will be the dividend per share forecast. Woodside put on hold a number of growth initiatives in the last 12 months and instead rewarded shareholders with a total dividend payout of $3.03 for the financial year 31 December. Based on today's share price, that puts Woodside on a trailing dividend yield of over 9% fully franked!
The consensus of 11 analysts puts this year's dividend payout at just $1.11 per share, or a yield of 3.4% fully franked, or 4.9% grossed up. This implies a payout ratio of 79%, based on a forecast earnings per share of $1.41.
Share price impact
Unless Woodside can pull a rabbit out of a hat, I can see small shareholders, especially those holding shares in SMSFs, exiting the stock following the result as the group's yield no longer satisfies their needs.
Other Important Numbers
The other major financial figures being predicted by analysts are:
- EBITDA of $3,272 million
- EBIT of $1,857 million
- Net profit (excluding outstanding items) of $1,131 million
Analysts will also look at further outlook statements on the Browse FLNG (Floating Liquefied Natural Gas) project and the possibility of further trains at the Pluto project.
