Analyzing Marathon Petroleum’s Dividend Yield

Marathon Petroleum’s dividend payment

In this part, we’ll discuss Marathon Petroleum’s (MPC) dividend yield before its first-quarter results.

Analyzing Marathon Petroleum’s Dividend Yield

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Marathon Petroleum’s dividend yield is 3.5%. The company’s dividend payments have been rising steadily over the past several quarters. In the first quarter, Marathon Petroleum paid a dividend of $0.53 per share, which represents 47% growth from the first quarter of 2017. The dividend was announced on January 28 and paid on March 11.

What to expect

Marathon Petroleum has been paying increasing and consistent dividends for the past several years. The company targets to grow its dividends 10% annually. In 2019, Marathon Petroleum is expected to pay a dividend per share of $2.12 dividend per share, 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 targets to return ~50% or more of its discretionary free cash flows to shareholders. The company’s existing authorization could lead to ~$4.9 billion of share buybacks until the end of 2020.

Peers’ dividend yield

Valero Energy’s (VLO) dividend yield is the highest at 4.1%. PBF Energy’s (PBF) yield is 3.7%, which is higher than Marathon Petroleum’s yield. Phillips 66 (PSX), HollyFrontier (HFC), and Delek US Holdings’ (DK) yields are 3.4%, 2.8%, and 2.9%, respectively—lower than Marathon Petroleum.