We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Does a Hike Make Murphy USA (MUSA) a Good Dividend Stock?
Read MoreHide Full Article
Murphy USA (MUSA - Free Report) recently got approval from its board of directors to increase the quarterly dividend by a penny (or 2.3%) to 45 cents per share, which translates into $1.80 per share on an annualized basis. The new payout will be made on Sep 5 to its common shareholders of record on Aug 26.
MUSA continues to display strength across all major categories, thanks to strong retail fuel margin contribution and robust tobacco sales, to go with an aggressive store expansion strategy and a resilient asset base. This positive backdrop, together with Murphy USA’s low-cost model, balanced capital allocation and healthy cash flows, allowed the Zacks Rank #3 (Hold) refining and marketing operator to reward investors with a dividend hike last week.
While stock buyback continues to be MUSA’s preferred tool to distribute cash, the company’s policy dictates that it plows back a small portion of its capital in paying dividends. Agreed, the company’s current dividend yield is very low at less than 1%, but it is well protected with a payout ratio of just 7. As a result, the dividend not only looks quite sustainable but also leaves enough scope for future dividend increases. Investors should note that Murphy USA was one of the very few enterprises to actually initiate their first dividends during the coronavirus crisis of 2020 when countless others were being cut.
Murphy USA is a leading independent retailer of motor fuel and convenience merchandise in the United States. The El Dorado, AR-based company, in its current form, came into existence following the 2013 spin-off of Murphy Oil Corporation’s downstream business into a separate, independent and publicly traded entity. Murphy USA markets refined products through a chain of retail stations, almost all of which are located near a Walmart superstore, primarily in the Southeast, Southwest and Midwest United States.
3 Energy Dividend Payers That Offer Better Yields Than MUSA
If you think Murphy USA’s dividend yield is too modest, here are some stocks that could be better choices.
HF Sinclair Corporation (DINO - Free Report) : A producer and marketer of gasoline, diesel fuel and other specialty products, HF Sinclair pays out a quarterly dividend of 50 cents ($2 annualized) per share that gives it a 4.23% yield at the current stock price. The company’s payout ratio is 31, with a five-year dividend growth rate of 8.45%.
ExxonMobil (XOM - Free Report) : ExxonMobil is one of the largest publicly traded oil and gas companies in the world, which participates in every aspect related to energy — from oil production to refining and marketing. XOM’s dividend of 95 cents per share ($3.80 annualized) represents a 3.32% yield. ExxonMobil’s payout ratio is 42, with a five-year dividend growth rate of 1.94%.
Valero Energy (VLO - Free Report) : Among all the independent refiners, Valero offers the most diversified refinery base with a capacity of 3.2 million barrels per day in its 15 refineries located throughout the United States, Canada, the United Kingdom, Ireland and Latin America. VLO pays out a quarterly dividend of $1.07 ($4.28 annualized) per share, which gives it a 3.03% yield at the current stock price. The company’s payout ratio is 24, with a five-year dividend growth rate of 2.48%.
See More Zacks Research for These Tickers
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Does a Hike Make Murphy USA (MUSA) a Good Dividend Stock?
Murphy USA (MUSA - Free Report) recently got approval from its board of directors to increase the quarterly dividend by a penny (or 2.3%) to 45 cents per share, which translates into $1.80 per share on an annualized basis. The new payout will be made on Sep 5 to its common shareholders of record on Aug 26.
MUSA continues to display strength across all major categories, thanks to strong retail fuel margin contribution and robust tobacco sales, to go with an aggressive store expansion strategy and a resilient asset base. This positive backdrop, together with Murphy USA’s low-cost model, balanced capital allocation and healthy cash flows, allowed the Zacks Rank #3 (Hold) refining and marketing operator to reward investors with a dividend hike last week.
You can see the complete list of today’s Zacks #1 Rank stocks here.
While stock buyback continues to be MUSA’s preferred tool to distribute cash, the company’s policy dictates that it plows back a small portion of its capital in paying dividends. Agreed, the company’s current dividend yield is very low at less than 1%, but it is well protected with a payout ratio of just 7. As a result, the dividend not only looks quite sustainable but also leaves enough scope for future dividend increases. Investors should note that Murphy USA was one of the very few enterprises to actually initiate their first dividends during the coronavirus crisis of 2020 when countless others were being cut.
Murphy USA is a leading independent retailer of motor fuel and convenience merchandise in the United States. The El Dorado, AR-based company, in its current form, came into existence following the 2013 spin-off of Murphy Oil Corporation’s downstream business into a separate, independent and publicly traded entity. Murphy USA markets refined products through a chain of retail stations, almost all of which are located near a Walmart superstore, primarily in the Southeast, Southwest and Midwest United States.
3 Energy Dividend Payers That Offer Better Yields Than MUSA
If you think Murphy USA’s dividend yield is too modest, here are some stocks that could be better choices.
HF Sinclair Corporation (DINO - Free Report) : A producer and marketer of gasoline, diesel fuel and other specialty products, HF Sinclair pays out a quarterly dividend of 50 cents ($2 annualized) per share that gives it a 4.23% yield at the current stock price. The company’s payout ratio is 31, with a five-year dividend growth rate of 8.45%.
ExxonMobil (XOM - Free Report) : ExxonMobil is one of the largest publicly traded oil and gas companies in the world, which participates in every aspect related to energy — from oil production to refining and marketing. XOM’s dividend of 95 cents per share ($3.80 annualized) represents a 3.32% yield. ExxonMobil’s payout ratio is 42, with a five-year dividend growth rate of 1.94%.
Valero Energy (VLO - Free Report) : Among all the independent refiners, Valero offers the most diversified refinery base with a capacity of 3.2 million barrels per day in its 15 refineries located throughout the United States, Canada, the United Kingdom, Ireland and Latin America. VLO pays out a quarterly dividend of $1.07 ($4.28 annualized) per share, which gives it a 3.03% yield at the current stock price. The company’s payout ratio is 24, with a five-year dividend growth rate of 2.48%.