HollyFrontier Corporation (NYSE: HFC) operates as an independent petroleum refiner and marketer in the United States. It produces light products, such as gasoline, diesel fuel, jet fuel, specialty lubricant products, liquefied petroleum gas, fuel oil, and specialty and modified asphalt. HollyFrontier has a strong history of increasing shareholder value with special dividends and share buybacks. The company trades at a discount to other refiners, has a strong balance sheet, is well managed and is looking to expand
HollyFrontier made the Goldman Sachs “Best Income Stocks” list for 2013. In a recent note, Goldman Sachs Group Inc. pointed out a number of stocks that could provide some easy money for investors by virtue of what the Wall Street bank calls a “social contract” — a combination of earnings appreciation due to expected share buybacks along with dividend yields. It could be easy money, provided shares remain stable or rise, for investors looking for as close to a guarantee as equities can offer.
HollyFrontier boasts an 8.4% dividend, more than twice that of any other company. But its relatively low 3.5% buyback earnings accretion keeps the total payout at 11.9%. Trading in the upper $40s, HollyFrontier also is considered to have the highest price upside of nearly 50%, with a target of $69.
HollyFrontier has an equity summary score of 7.6 out of 10 for a Bullish outlook. HFC has a mean analyst recommendation of 2.2 out of 4.0 for a BUY rating.
HollyFrontier reported 3Q earnings increased 18.5% and 9 months earnings increased 15% from the same periods a year earlier.
HollyFrontier reported third quarter net income attributable to stockholders of $600.4 million or $2.94 per diluted share for the quarter ended September 30, 2012, compared to $523.1 million or $2.48 per diluted share for the quarter ended September 30, 2011. For the nine months ended September 30, 2012, net income attributable to HollyFrontier stockholders totaled $1,335.6 million or $6.44 per diluted share compared to $800.0 million or $5.63 per diluted share for the nine months ended September 30, 2011.
HollyFrontier’s President & CEO, Mike Jennings, commented, “We had a tremendous quarter with third quarter results reaching new record levels. Exceptionally high inland to coastal crude oil differentials as well as robust heavy crude oil differentials helped drive our refined product margins to all time highs. Looking forward, we believe that the structural crude advantages currently driving our strong operating margins will continue to positively impact our operating income, allowing us to continue to pay both regular and special dividends. We remain focused on increasing total shareholder return while maintaining a strong balance sheet.”
On November 1, HollyFrontier raised its quarterly dividend 33% and also unveiled an additional special payout of 50 cents per share, the refiner’s latest moves to reward investors.
The five-cent increase to HollyFrontier’s regular dividend brings the payout to 20 centsper share and will cost the company about $40.7 million more a year. HFC has a current dividend yield of 1.69%. The latest dividend increase represents the fourth dividend increase since the company’s merger in July 2011.
HollyFrontier said its special cash dividend, its fifth special payout this year. The company’s board year-to-date has declared $3.10 in special and regular dividends, which represents an approximate 8% cash yield.
HollyFrontier Corporation (NYSE: HFC) was one of the big winners for subscribers to the Get Rich Monthly income Plan. HFC was purchased in January 2012 as part of the perpetual covered call strategy. Monthly Income subscribers received the $3.10 in dividends and $1,690 in total call option premium. The total return on HFC during 2012 was 212% for newsletter subscribers.