Marathon Petroleum Corp's Dividend Analysis
Assessing the Sustainability and Growth of MPC's Dividends
Marathon Petroleum Corp (NYSE:MPC) recently announced a dividend of $0.83 per share, payable on 2024-03-11, with the ex-dividend date set for 2024-02-20. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Marathon Petroleum Corp's dividend performance and assess its sustainability.
What Does Marathon Petroleum Corp Do?
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Marathon Petroleum is an independent refiner with 13 refineries in the midcontinent, West Coast, and Gulf Coast of the United States with total throughput capacity of 2.9 million barrels per day. Its Dickinson, North Dakota, facility produces 184 million gallons a year of renewable diesel. Its Martinez, California, facility will have the ability to produce 730 million gallons a year of renewable diesel once converted. The firm also owns and operates midstream assets primarily through its listed master limited partnership, MPLX.
A Glimpse at Marathon Petroleum Corp's Dividend History
Marathon Petroleum Corp has maintained a consistent dividend payment record since 2011, distributing dividends on a quarterly basis. As a dividend achiever, the company has increased its dividend each year for at least the past 13 years, reflecting a strong commitment to returning value to shareholders. Below is a chart showing annual Dividends Per Share to track historical trends.
Breaking Down Marathon Petroleum Corp's Dividend Yield and Growth
As of today, Marathon Petroleum Corp currently has a 12-month trailing dividend yield of 1.81% and a 12-month forward dividend yield of 1.94%, suggesting an expectation of increased dividend payments over the next 12 months. Over the past three years, the company's annual dividend growth rate was 5.50%, which increased to 9.70% per year over a five-year horizon. Impressively, the annual dividends per share growth rate over the past decade stands at 15.50%. Consequently, the 5-year yield on cost for Marathon Petroleum Corp stock as of today is approximately 2.88%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. Marathon Petroleum Corp's dividend payout ratio is 0.13 as of 2023-12-31, indicating that a significant part of its earnings is retained for future growth and unexpected downturns. The company's profitability rank, at 7 out of 10, suggests good profitability prospects, with net profit reported in 9 out of the past 10 years.
Growth Metrics: The Future Outlook
Robust growth metrics are essential for the sustainability of dividends. Marathon Petroleum Corp's growth rank of 7 out of 10 indicates a good growth trajectory relative to competitors. The company's revenue per share and 3-year revenue growth rate, increasing by approximately 27.10% per year on average, outperform approximately 78.19% of global competitors. Additionally, the 3-year EPS growth rate, at an average of 90.60% per year, outperforms approximately 91.34% of global competitors, underscoring its earnings growth capability crucial for sustaining dividends.
Next Steps
In conclusion, Marathon Petroleum Corp's consistent dividend payments, robust dividend growth rate, conservative payout ratio, and strong profitability and growth metrics paint a promising picture for value investors. The company's commitment to shareholder returns, coupled with its financial stability and growth prospects, positions it as a potentially attractive choice for those seeking dividend income. As investors anticipate the next dividend payment, they can take comfort in the company's history and financial health, which suggest a sustainable dividend policy moving forward. For those looking to expand their portfolios with high-dividend yield stocks, GuruFocus Premium offers a High Dividend Yield Screener to discover similar investment opportunities.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
