Rising Dividends And Upward Earnings Revisions Bode Well For This Cheap Refiner

| About: HollyFrontier Corp. (HFC)

HollyFrontier (NYSE: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:

  1. 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.
  2. The stock is selling near the bottom of its five-year valuation range based on P/E, P/CF, and P/B.
  3. HollyFrontier is selling at less than six times operating cash flow and under seven times forward earnings.
  4. 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. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.