Assessing the Sustainability and Growth of HF Sinclair Corp's Dividend
HF Sinclair Corp (DINO, Financial) recently announced a dividend of $0.5 per share, payable on 2024-03-05, with the ex-dividend date set for 2024-02-23. 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 HF Sinclair Corp's dividend performance and assess its sustainability.
What Does HF Sinclair Corp Do?
HF Sinclair Corp is an integrated petroleum refiner that owns and operates seven refineries serving the Rockies, midcontinent, Southwest, and Pacific Northwest, with a total crude oil throughput capacity of 678,000 barrels per day. It can produce 380 million gallons of renewable diesel annually. It holds a marketing business with over 300 distributors and 1,500 wholesale branded sites across 30 states. It also has a 47% ownership stake in Holly Energy Partners, which owns and operates petroleum product pipelines and terminals principally in the southwestern United States, but has announced a proposal to purchase the remaining 53%.
A Glimpse at HF Sinclair Corp's Dividend History
HF Sinclair Corp has maintained a consistent dividend payment record since 1988. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down HF Sinclair Corp's Dividend Yield and Growth
As of today, HF Sinclair Corp currently has a 12-month trailing dividend yield of 3.07% and a 12-month forward dividend yield of 3.17%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, HF Sinclair Corp's annual dividend growth rate was -3.60%. Extended to a five-year horizon, this rate decreased to -11.90% per year. And over the past decade, HF Sinclair Corp's annual dividends per share growth rate stands at -1.00%.
Based on HF Sinclair Corp's dividend yield and five-year growth rate, the 5-year yield on cost of HF Sinclair Corp stock as of today is approximately 1.63%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-09-30, HF Sinclair Corp's dividend payout ratio is 0.15.
HF Sinclair Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks HF Sinclair Corp's profitability 8 out of 10 as of 2023-09-30, suggesting good profitability prospects. The company has reported net profit in 8 years out of the past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. HF Sinclair Corp's growth rank of 8 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and HF Sinclair Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. HF Sinclair Corp's revenue has increased by approximately 21.80% per year on average, a rate that outperforms approximately 71.51% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, HF Sinclair Corp's earnings increased by approximately 39.30% per year on average, a rate that outperforms approximately 68.49% of global competitors.
Next Steps
In conclusion, HF Sinclair Corp's upcoming dividend, consistent historical payments, and a sound payout ratio indicate a commitment to returning value to shareholders. However, the negative dividend growth rate over the past few years raises questions about long-term dividend growth. The company's strong profitability and growth metrics offer some reassurance about its ability to sustain and potentially increase dividends in the future. Investors should consider these factors alongside their investment goals and market conditions when evaluating HF Sinclair Corp as a potential addition to their portfolios. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
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.
