Do Analysts Expect Tesoro’s Dividend Payment to Surge?
Tesoro’s dividend per share
Tesoro’s dividend payments have been growing steadily in the past two years. In 2Q17, Tesoro (TSO) paid a dividend of $0.55 per share, which represents 29% growth from 2Q15. The dividend was announced on May 9, 2017, and it was paid on June 15, 2017.
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Wall Street analysts expect Tesoro’s dividend payment to rise in 3Q17 to $0.59 per share, an increase of ~7% over the previous quarter. This could be due to improving refining margins, indicated by Tesoro’s rising refining index values, which we discussed earlier in the series.
The acquisition of Western Refining (WNR) is likely to lead to a rise in earnings due to operational synergies and higher capacities. For additional details, please read Tesoro Completes WNR Acquisition: A Post-1Q17 Update.
Tesoro’s dividend yield
A dividend yield is measured as annualized dividends divided by the stock price. Tesoro’s current dividend yield stands at 2.4%, up from its 2.0% dividend yield in 2Q15. The increase in yield is due to the steeper growth in its dividend compared to the appreciation in Tesoro’s stock price during this period.
Peers’ dividend yield
In the same period, Marathon Petroleum’s (MPC) dividend yield rose from 2.0% to 2.7%, and Phillips 66’s (PSX) dividend yield increased from 2.5% to 3.5%. Comparatively, the SPDR S&P 500 ETF’s (SPY) dividend yield rose from 1.8% in 2Q15 to its current level of 1.9%.
Valero Energy’s (VLO) dividend yield rose even more sharply from 2.8% to 4.3%. Among the smaller players, Delek US Holdings’ (DK) and HollyFrontier’s (HFC) respective dividend yields soared from 1.6% and 3.3% in 2Q15 to their current levels of 2.3% and 5.1%.