Oil refining and marketing company, HollyFrontier Corporation (HFC) has increased its quarterly cash dividend by 6.7% to 32 cents per share ($1.28 per share annualized). This marks the sixth dividend hike for the company since its merger in 2011. HollyFrontier also declared a special cash dividend of 50 cents per share.
The regular dividend is to be paid on Jun 27 to shareholders of record as of Jun 6, while the special dividend will be paid on Jun 13 to shareholders of record as of May 30.
HollyFrontier’s management stated that since the merger, the company has returned more than $2.2 billion to shareholders through dividends and share buybacks.
Dallas, TX-based HollyFrontier came into existence after the merger of Holly Corporation and Frontier Oil Corporation in Jul 2011. It is an independent oil refiner that produces gasoline, diesel fuel and jet fuel. The company operates 5 refineries and sells its refined products primarily in the Southwest U.S., the Rocky Mountains, the Pacific Northwest and other nearby Plains states. An affiliate of the company holds a 39% interest in Holly Energy Partners, L.P. (HEP).
Last week, the company reported first-quarter 2014 earnings of 76 cents per share, which missed the Zacks Consensus Estimate by a penny owing to weak refining margins. However, things might improve in the next quarter, as suggested by the increase in estimates. In the past 30 days, both the current quarter and full-year estimates have moved north.
HollyFrontier currently carries a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. market in the next one to three months.
Meanwhile, one can consider better-ranked players in the same industry like Valero Energy Corporation (VLO) and NGL Energy Partners LP (NGL). Both these stocks currently hold a Zacks Rank #2 (Buy).