Is EOG Resources Stock A Buy For Its Shrinking Share Count?

EOG Resources (EOG) has gained about 25% over the past year. The company pays a growing dividend and keeps buying back stock, so each remaining share owns a little more of the business every year. Over the last three years, though, that has not made the earnings behind your shares bigger. It has made them shrink more slowly.

Why Did Your Slice Of EOG Grow While Its Profit Shrank?

Over the last three years the share count has come down about 3.2% a year on average. Net income fell 5.8% a year on average over the same stretch. Earnings per share fell 2.8% a year on average. The three-point difference is the shares that are no longer there.

That is the denominator effect, and it is worth seeing plainly. A buyback cannot turn a falling profit into a rising one. It slows the fall. For a producer whose earnings move with the oil price, that is a cushion, not an engine.

Can EOG Afford This Payout If Oil Slips?

The cash going out is real money. Buybacks and dividends came to 6.6% of the company’s market value over the past twelve months, after allowing for stock-based compensation. Free cash flow covered that about 1.3 times. Net debt is about 0.2 times EBITDA, a conservative level of leverage.

What pays for it is the cost side of the business. Direct well costs in the Eagle Ford are below $525 per foot, the lowest in the company’s long history in that play by its own account. In the Delaware Basin, the Janus gas processing plant averaged above 99% utilization through the first half of 2026 and is lifting netbacks by more than $0.65 per Mcf. Management said in August 2026 that the 2026 program, which covers production growth, exploration and a regular dividend it has not cut or suspended in 28 years, is funded at a WTI breakeven below $50 a barrel.

So Should You Own EOG For The Cash?

Close to 11 times trailing earnings is not a demanding price for a machine like this. The catch is that these are oil-price earnings, and no amount of share retirement protects oil and gas producers from a lower one.

What does change is the inventory that feeds the machine. The Austin Chalk acreage the company leased in Lavaca County cost an average of about $1,200 an acre, pays back in under a year at $65 WTI, and holds about 125 remaining two-mile locations. Those locations are about one additional year of drilling inventory at current Eagle Ford activity levels. Adding inventory at that price is how a low-cost producer keeps a payout funded without borrowing for it.

So: a fair price for a funded payout, and a cheap one only if oil holds up. The shrinking share count alone is not enough of a reason to buy. If the cash is your reason for owning it, the fair question is who else hands back as much, and our dividend and buyback screen ranks the market on exactly that.

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