I think you have no clue how corporate mgmt should work. Nobody knows what crack spreads are going to do. For now the company is doing well and the special div reflects that. it would be very foolish to raise the regular div to .80 only to cut it back severely if/when the spreads tighten. This is responsible mgmt, if only all companies were run as well.
I would forget the special dividend. It doesn't do that much good for people who also sell covered calls. Make the regular dividend 40 cents and if things are still allowing special dividends, raise it to 50 cents. If you want, also have a year end dividend, but cut out the quarterly nonsense.
They have been raising the regular divy on a steady basis over the past 6 quarters which actually means that management is quite confident about the future of the company. Raising it slowly over time on a steady basis is actually better for the share price than to have a big jump all at once, which then raises questions as to whether its sustainable or not. They are showing confidence in a growing business.
And since they have been raising the regular on a steady basis, most people would see the special for just what it is...the company has been performing so well that they are outpacing even managements expectations and they have way too much money on their balance sheets. So, return it to the owners. it has nothing to do with not being confident about the future.
Interesting thread..... BODs have a number of choices to do with profits.... Or a combo of options to pick from. What they do does give is a hint of what they see going forward.
They can pay a dividend, they can invest in high return capital projects ( for instance XOM makes the highest average returns on capital employed), they can buy back stock if undervalued .
Frontier management is very conservative by history and by nature vs say Tom Omalley or Bill Greehey. When you hold Hfc you just know that and appreciate that.
What I like to do is own different refiner stocks ( VLO, Hfc, PBF for me personally) because I believe there is no perfect strategy in this business for 100% of the time.
I also know that the market gets crazy about these stocks at times ( high and lows are extreme) and I personally change my ownership quantities constantly. For instance I always sell 52 week highs and buy on big swings down . Why? Because history shows us that refiner stocks always swing hard up and down .
Hfc management is the most disciplined of the smaller refiners ... Bar none in my book. So now they are paying special dividends because they have few opportunities to make 20% returns on capital projects or purchases.
Some might say they are not aggressive enough about the future.... I disagree based on their long time performance. And the special dividends sure have been nice.
merrill put a 68.00 price target over the next 12 months i wanted 2000 shares my first purchase 500 was 51 then it dropped i added @47.70- 500 ,got the third @49 50 ,so now i'll wait and see if i can get it on a bigger drop an additional 500 ...then i wait
With cash in excess of debt of more than $2B in the bank, methinks they can pay the special for the forseeable future. Gibbs said as much on the conference call.
As far as remanaz' comments about socialist gov't. This board has maintained its focus because participants have recognized this isn't the place to air their political views and kept them off of it. It would be great it you would do the same.
PS - ethanol credits are a product of the ag industry and their wholly-owned representatives in the midwest.
Ethanol credits basically came out of left field thanks to our socialistic government...so I cannot blame the company management for hoarding a bit more cash at the present time. These credit costs may escalate...who knows????