PBF Energy’s dividend yield
PBF Energy (PBF) has the best dividend yield among American refining stocks. Currently, the company’s yield is 4.8%. The stock’s market cap is ~$3 billion. HollyFrontier (HFC) and Delek US Holdings (DK) have lower dividend yields at 3.3% and 3.1%, respectively.
The rise in PBF Energy’s yield is led by a 20% decline in its stock in the second quarter. PBF Energy has made a dividend payment of $0.3 per share in the second quarter. The dividend was announced on May 1 and paid on May 30. PBF Energy has paid consistent and stable dividends in the past three years despite refining margin volatility. PBF Energy made a dividend payment of $0.3 per share on May 27, 2015.
PBF Energy trades at a forward PE ratio of 4.5x, which is below the peer average of 5.4x. PBF Energy’s lower valuations are mainly due to its above-average debt. The company’s total debt-to-total capital ratio was 39% in the first quarter—above the peer average of 36%. In the first quarter, the company’s cash flow couldn’t cover essential expenses like capex and dividends. The company’s operating cash flows were at -$150 million. The capex and dividend outflows were at $238 million and $36 million, respectively.
In 2019, analysts expect PBF Energy’s earnings to fall the most among its peers. The company’s earnings could fall 46% to $1.8 per share due to weaker oil spread expectations. The company sees the narrowing light-heavy crude oil spread as a challenging area.
PBF Energy has the best dividend yield. However, the company’s financials are weak with higher debt and a tighter cash flow position. PBF Energy’s earnings could fall the most among its peers in 2019.