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Have the Dividend Yields of MPC, VLO, PSX, and HFC Surged?

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Dividend payments in the fourth quarter

Marathon Petroleum’s (MPC) dividend payment rose 15% YoY (year-over-year) to $0.46 per share in the fourth quarter. Similarly, Valero Energy’s (VLO) and Phillips 66’s (PSX) dividend payments rose 14% YoY each to $0.8 per share each in the quarter. HollyFrontier’s (HFC) dividend payment was stable YoY at $0.33 per share in the period.

Refining stocks’ dividend yields rose in the latter part of 2018.

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Dividend yields rose

Valero’s dividend yield has risen the most compared to its peers. Its current dividend yield stands at 4.3%, up from 2.7% in the third quarter. The rise in its yield is the result of a fall in its stock price in the stated period. Valero has consistently returned wealth to its shareholders in the form of dividends and share buybacks. In the first nine months of 2018, the company paid $1.0 billion in dividends and repurchased $1.1 billion worth of shares.

Similarly, Phillips 66’s dividend yield has risen from 2.6% in the third quarter to its current level of 3.7%. In the first nine months of 2018, Phillips 66’s dividend cash outflows and share repurchases stood at ~$1.1 billion and ~$4.1 billion, respectively. Since 2012, Phillips 66’s dividend has risen at a CAGR (compound annual growth rate) of 27%.

Likewise, the dividend yields of Marathon Petroleum and HollyFrontier have each risen 0.8% over the third quarter to their current levels of 3.1% and 2.6%, respectively. Marathon Petroleum has been paying reliable and growing dividends for the past several years. Since 2011, the company’s dividend has risen at a 24% CAGR.

In the next article, we’ll review the institutional holdings in refining stocks.

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