Delek’s dividend yield
Delek US Holdings (DK) occupies the fifth position in terms of dividend yield among the seven downstream dividend-yielding stocks we’re discussing in this series. DK has the lowest market cap of around $5 billion. DK has a current dividend yield of 1.9%. In Q3 2018, DK made a dividend payment of $0.25 per share, which was announced on August 7 and paid on September 4. DK has paid dividends for the past three years. Also, during the period, despite refining margin volatility, dividends have risen. DK made a dividend payment of $0.15 per share in September 2015. However, peer PBF Energy’s (PBF) dividend payments have remained stable in the past three years.
Delek trades at a forward PE of 6.7x, the lowest compared to the forward PEs of other refiners. Delek has faced losses for several quarters in the past (except for Q3 2017 and Q4 2017). However, Delek made a profit in the second quarter. In Q2 2018, Delek’s adjusted earnings stood at $89 million compared to an adjusted loss of $25 million in Q2 2017. Plus, DK’s adjusted EPS surpassed Wall Street analysts’ expectation by 16% in the second quarter.
Further, the company captured $131 million of annualized synergies from the integration of Alon USA Energy. DK expects to achieve annual synergies between $130 million and $140 million in 2018 from the acquisition. Thus, Delek’s financial position seems to be recovering.
Move onto the next part to learn about HollyFrontier’s (HFC) dividend yield.