HF Sinclair: Better Ways To Play A Refining Upcycle

Summary

• HF Sinclair's shares have rebounded with improving crack spreads, but still lag sector leaders due to weaker scale and balance sheet.
• Refining margins are recovering, and DINO is well-positioned geographically to benefit from discounted crude and resilient gasoline demand.
• Despite a solid 12% free cash flow yield and secure 4.6% dividend, peers like MPC and VLO offer better capital return and scale advantages.
• I maintain a 'hold' rating: DINO is fundamentally sound, but there are more attractive opportunities in the refining sector.

HABesen/iStock Editorial via Getty Images

Shares of HF Sinclair (NYSE:DINO) have been a poor performer over the past year, losing about 18% of their value as strong global refining utilization has weighed on crack spreads. However, shares have bounced more than 50% from

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.