HollyFrontier (HFC) is a refiner that has had a lot of positive news and catalysts recently. Value investors looking for cheap valuations and rising dividend payouts should take a close look at the shares.
Here are key recent catalysts for Holly Frontier:
- The company announced a 50-cent special dividend that will be paid at the end of November.
- Holly Frontier also said it will be raised from 15 cents a quarter a share to 20 cents -- a 33% increase.
- Year to date, Holly Frontier has declared $3.10 of special and regular dividends representing an approximate 8% cash yield on the current stock price.
- Consensus earnings estimates for FY 2012 and FY 2013 have risen some 20% in the last three months, bucking the trend of downward revisions throughout the S&P over that time period.
HollyFrontier is an independent petroleum refiner and marketer in the United States.
Here are four additional reasons why HFC is solid value play at under $38 a share:
- The median price target held by the 14 analysts who cover the stock is $45.50 a share. S&P has a "buy" rating and a $48 target on HollyFrontier.
- The stock is selling near the bottom of its five-year valuation range based on P/E, P/CF, and P/B.
- HollyFrontier is selling at less than six times operating cash flow and under seven times forward earnings.
- The company has one of the best balance sheets among the refiners with no net debt and will now pay a dividend 0f 2.5%, not including special dividends.
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in HFC over the next 72 hours.