BRENTWOOD, Tenn. - Delek US Holdings (NYSE:DK), Inc., a diversified downstream energy company, announced an increase in its regular quarterly dividend. Shareholders will receive $0.255 per share payable on August 19, 2024, to those on record as of August 12, 2024. This marks a modest rise of $0.005 per share.
Delek US operates in various sectors, including petroleum refining, logistics, and retail. Its refining capabilities span across four locations in Texas, Arkansas, and Louisiana, with a total capacity of 302,000 barrels per day. Additionally, the company has interests in a 650-mile crude oil pipeline and approximately 250 convenience stores in West Texas and New Mexico.
The logistics segment is managed by Delek Logistics Partners, LP (NYSE: NYSE:DKL), a master limited partnership with a focus on midstream energy infrastructure. As of June 30, 2024, Delek US and its subsidiaries hold a 72.6% stake in Delek Logistics Partners, including the general partner interest.
The dividend increase is based on information provided by a press release statement from Delek US Holdings, Inc. The company has not undertaken to update the forward-looking statements to reflect subsequent events or circumstances, except as required by law or regulation. For more information about Delek US Holdings, investors can refer to the company's website and investor relations pages.
In other recent news, Delek US Holdings, Inc. has faced several adjustments to its shares target by various firms due to concerns about earnings and strategic reviews. Mizuho Securities reduced the company's price target to $25 from $27, citing potential misses in EBITDA, Free Cash Flow, and Earnings Per Share. This was attributed to lower benchmark crack spreads and weaker capture rates. Additionally, TD Cowen downgraded Delek US from Hold to Sell and lowered the price target to $20.
Piper Sandler also reduced its target to $25 while maintaining a Neutral rating, noting key market movements that could potentially affect the company's performance. JPMorgan also adjusted its outlook, reducing the stock's price target to $25 and maintaining an Underperform rating.
These revisions come in the wake of Delek's mixed Q1 results, which reported a net loss of $33 million despite strong operational results in its Refining and Logistics segments. The company is currently exploring strategic options for its retail and marketing businesses.
These recent developments, including the adjustments from Mizuho Securities, Piper Sandler, TD Cowen, and JPMorgan, reflect their analysis of Delek's various business segments and ownership interests. As these recent developments unfold, investors are advised to keep a close eye on further updates.
InvestingPro Insights
Delek US Holdings, Inc. has recently declared a slight increase in its regular quarterly dividend, indicating a potential positive outlook on its financial stability. However, a deep dive into the company's financials through InvestingPro reveals a more nuanced picture. With a market capitalization of $1.53 billion, Delek's financial metrics suggest some areas of concern alongside points of strength.
InvestingPro data shows a significant return over the last week, with a 1 Week Price Total Return of 8.44%. This short-term performance could signal investor confidence following the announcement of the dividend increase. Yet, the company's P/E ratio stands at -20.31, and it's adjusted P/E ratio for the last twelve months as of Q1 2024 is even lower at -40.12, reflecting challenges in profitability. This is further underscored by a revenue decline of 17.71% over the same period, aligning with an InvestingPro Tip that analysts anticipate a sales decline in the current year.
On a more positive note, Delek's valuation implies a strong free cash flow yield, as per another InvestingPro Tip. This could be attractive to investors looking for companies that generate sufficient cash to support operations and return value to shareholders. Moreover, the stock generally trades with low price volatility, which may appeal to investors seeking stability in their portfolio.
For investors interested in a deeper analysis, there are additional InvestingPro Tips available that could provide further insights into Delek's financial health and future prospects. In total, there are 9 more InvestingPro Tips listed on the platform, which can be accessed for a comprehensive understanding of the company's performance and valuation.
As the next earnings date approaches on August 6, 2024, investors will be keen to see whether Delek can address the challenges highlighted by the analysts and InvestingPro data, and leverage its strengths to improve its financial position.
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