Marathon Petroleum’s (MPC) dividend yield has increased due to a fall in its stock price. Before we review the stock’s yield trend, let’s look at the company’s dividend payment in the first quarter.
Marathon Petroleum’s dividend payments have risen in the past few years. In the first quarter, Marathon Petroleum paid a dividend of $0.53 per share on March 11. The dividend was announced on January 28. Marathon Petroleum’s first-quarter dividend payment represents 15% growth compared to the first quarter of 2018.
Currently, Marathon Petroleum’s dividend yield is 3.5%. The dividend yield has risen from 2.6% in the first quarter of 2018. The yield increased due to a 15% YoY decline in Marathon Petroleum’s stock price during the stated period. The stock fell ~28% in the fourth quarter, which impacted the stock’s overall returns for the past 12 months.
Marathon Petroleum has been paying growing and reliable dividends for the past several years. The company wants to grow its dividends 10% annually. In 2019, the company is expected to pay a dividend per share of $2.12, which represents a 15% annual growth rate for the year.
Marathon Petroleum plans to buy back shares to share the benefits of higher earnings and cash flows. The company wants to return ~50% or more of its discretionary free cash flows to shareholders. Marathon Petroleum’s existing authorization could lead to ~$4.9 billion of share buybacks by the end of 2020.
Peers’ dividend yield
Valero Energy (VLO) has the highest dividend yield of 4.2% among Marathon Petroleum’s peers. Phillips 66 (PSX) and PBF Energy’s (PBF) yields are 3.2% and 3.7%, respectively. However, HollyFrontier (HFC) and Delek US Holdings’ (DK) dividend yields are 2.5% and 3.0%, respectively.