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PBF Energy with 2.5% Dividend Yield Ranks Third

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PBF’s dividend yield

In the previous part, we analyzed the dividend yield of Valero Energy (VLO), the second-highest dividend-yielding stock, among the seven downstream stocks compared in this series. Now, we’ll look at PBF Energy’s (PBF) dividend yield.

PBF occupies the third slot in the list of seven dividend-yielding refining stocks in our review. PBF is an American refining company with refining and logistics operations. PBF’s market cap of ~$5.0 billion ranks it sixth among the seven companies being discussed in this series.

PBF has a current dividend yield of 2.5%. In the second quarter, PBF made a dividend payment of $0.30 per share. This dividend payment was announced on May 3 and was paid on May 30.

PBF has consistently paid dividends despite refining margin volatility in the past three years, and its dividends have remained stable during this period. PBF made a dividend payment of $0.30 per share on May 27, 2015.

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Valuations

PBF traded at a forward PE of 7.5x in the second quarter of 2015. Currently, PBF’s forward PE stands at 12.2x, denoting a rise in valuations in the past three years. However, PBF’s current forward PE stands below the peer average of 13.5x of the seven refiners discussed in this series.

PBF’s total-debt-to-capital ratio stood above the peer average in the first quarter. PBF Energy faces a high RINs (Renewable Identification Numbers) expense burden. Like PBF, Valero Energy (VLO) also faces regular RINs expenses.

With lower RINs prices in the second quarter so far, PBF could witness a decline in its second-quarter RINs expenses. Also, an improving refining environment could enhance PBF’s refining earnings in the second quarter.

PBF has decent growth prospects. The company has improved its refining capacities and logistics abilities with acquisitions in the last few years. PBF’s midstream MLP PBF Logistics (PBFX) is growing via dropdowns.

Move to the next part to learn about the dividend yield of Marathon Petroleum (MPC).

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