A New Energy Firm Debuts With a 7.7% Dividend Yield -- Barrons.com

Dow Jones03:22

By Avi Salzman

WhiteHawk Minerals, a company that owns mineral rights in some of America's most prolific natural-gas basins, made its debut on the New York Stock Exchange Tuesday after raising $200 million in its initial public offering. Shares opened at $26 around midday and fluctuated in early trading, rising 0.2% to $26.05.

At a time when the energy industry is experiencing severe shortages and volatility because of the Iran war, WhiteHawk offers a different kind of investment thesis. The company produces steady cash flows from the royalty payments it gets from companies that drill for natural gas across its 3.4-million acre portfolio, and pays it back to shareholders. At its IPO price, shares yield 7.7%, versus a measly 1.1% for the S&P 500. America's biggest natural gas producers, from EQT to Expand Energy, pay royalties to WhiteHawk.

In an interview, CEO Daniel Herz told Barron's that the company is capital-light -- he lets others take the risk of drilling wells and predicting prices. WhiteHawk hedges roughly 90% of its commodity price risk over the next 12 months, and 80% of its price risk over the subsequent 12 months, Herz said. It has been growing quickly, acquiring rights from private-equity firms looking to cash out. The company's financials, which were restated because of "certain material accounting errors identified by management" in April, show it lost $3.6 million in 2025 on $67.6 million in revenue. Changes in the value of derivatives can have large impacts on earnings.

Herz said the company has never had a problem covering its dividend -- even when natural-gas prices fell to multiyear lows last year. "Our target is to pay at least 75% of our cash available for distribution in the form of a dividend, and my expectation over time is to very much grow that dividend," he said.

Write to Avi Salzman at avi.salzman@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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June 09, 2026 15:22 ET (19:22 GMT)

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