HollyFrontier Has Slumped 18% in Q2, Dividend Yield Touches 3.3%

HollyFrontier (HFC) stock has fallen 18% this quarter due to the company’s weak first-quarter earnings and oil spreads narrowing, boosting its dividend yield. HollyFrontier, whose dividend payments have been steady for the past few years, paid a dividend of $0.33 per share on June 5. It was announced on May 8.

Since Q2 2018, HollyFrontier’s dividend yield has risen to 3.3% from 2.2%, driven by its stock falling 41%. In Q1 2019, HFC returned $57 million through dividends and $78 million through stock repurchases. During the company’s first-quarter earnings call, CFO and executive VP Richard Lawrence Voliva said, “So we are evaluating the dividend in light of the additions we’ve made particularly to our Lubes and Specialty businesses. We’re really early in this process, frankly. I think we’re going to have a better idea as we integrate Sonneborn over the next couple of quarters. So to George’s point, I think certainly in the near term, we’d expect to continue to return excess cash of over $500 million in the form of buybacks.”

Delek US Holdings’s (DK) dividend yield is 3.2%, lower than HollyFrontier’s. However, some peers’ yields are higher: Valero Energy’s (VLO), Phillips 66’s (PSX), Marathon Petroleum’s (MPC), and PBF Energy’s (PBF) dividend yields are 4.7%, 4.2%, 4.4%, and 5.0%, respectively.