Analyzing Delek US Holdings’ Cash Flow Trend



DK’s cash flow analysis

In the previous part of this series, we examined Delek US Holdings’ (DK) leverage position. In this part, we will analyze DK’s cash flow.

Delek US Holdings has seen a decline in its cash balance from 3Q14–3Q15. DK’s cash balance in 3Q15 stood at $366 million, falling by 3% over 3Q14. In the third quarter, DK’s peers Western Refining (WNR) and PBF Energy (PBF) had their cash balances standing at $709 million and $707 million, respectively.

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DK’s cash flow from operations and investing

Delek US Holdings’ (DK) cash flow from operations has been volatile in the past few quarters. In 9M15, DK’s cash from operations stood at $191.7 million compared to $241.7 million in 9M14, mainly due to a fall in net income.

In 3Q15, DK’s cash outflow on account of investing activities stood at $49 million, lower than 2Q15. Delek saw a spike in investing outflows to $264 million in 2Q15 due to the acquisition of interests in Alon USA Energy (ALJ). The company has continued its focus on growth via acquisition as well as by organic capital spending. In 9M15, Delek has committed $174 million toward capex compared to $193 million in 9M14.

DK’s cash flow from financing

Delek US Holdings’ (DK) cash flow from financing activities mainly consisted of changing debt levels, dividend payments, and share buybacks. The company has raised funds as well as repaid debt from 3Q14 to 3Q15, adapting to the changing cash flow environment.

Plus, Delek has consistently paid dividends and repurchased shares. In 9M15, DK’s cash outflow due to its dividends stood at $27.6 million compared to $44.7 million in 9M14. Plus, DK repurchased $29 million in shares in 9M15 compared to $41.6 million in 9M14.

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