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Delek US Holdings: Recovery Finally Underway, Dividends Should Return In 2022

Dec. 01, 2021 10:56 AM ETDelek US Holdings, Inc. (DK)9 Comments
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  • After facing a very tough time since the beginning of 2020, it appears a recovery is finally underway for Delek US Holdings.
  • Their operating cash flow is trending higher and when removing the temporary impacts of working capital movements, it reached the highest level since the beginning of 2020.
  • This has helped push their net debt lower and keep their leverage only moderate with further decreases likely in 2022, which should allow for their dividends to return.
  • Whilst management is currently remaining cautious about reinstating their dividends, this will likely change as the recovery continues as hoped.
  • Although the recent fears surrounding the new Omicron Covid-19 strain could derail this recovery, I still believe that upgrading my rating to bullish from neutral is now appropriate.

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After facing a very tough 2020, Delek US Holdings (NYSE:DK) was seeing positive signs of a recovery in early 2021 despite not being out of the proverbial woods, as my previous article

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I am no longer active, as I am taking a hiatus from finance to pursue business ventures in other sectors.  I hope that my analysis was helpful to investors across the years, thank you.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within 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.

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Comments (9)

Wind25 profile picture
Thanks Daniel for the article.
This year supposed to be big snap back for oil & gas industry (refiners in particular). Betting on DK and peers recovery. Cheers ))
Thanks for the article. Agree with your positive outlook and opened a position at $15. Plan to add on dips into the $14s.while waiting for a better 2022.

Happy New Year!! Cheers!!
skiselev81 profile picture
Why is there zero discussion about DKL and DK's relationship and holdings in DKL?
I bought Friday and Monday. Rationale was Texas will not close down again. This is a 50% gainer.
TJRyan profile picture
See it when I see it..
Come back uncle Carl.
With their stock selling at a give away price now is the time to announce a buyback program.In my opinion the dividend can wait. The new Wink to Webster pipeline will start adding even more to FCF in '22.
@jack20 I agree that something needs to be done to stabilize the share price. Uzi mentioned that they will consider how to unlock more shareholder value if the price continues to be depressed.. Let's see.
@BoilerUp Trader Looks like you predicted it. Strategy appears to be "reduce stake in DKL" and perhaps "buy DK stock on the open market," although they haven't actually announced that yet. Not sure what else they will do with the money.
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