Western Refining, Inc. (WNR) reported a 15.4% sequential increase in its quarterly dividend. The oil refiner and marketer approved a fourth-quarter dividend of 30 cents per share, up from 26 cents paid in the third quarter.
The company added that the new dividend is payable on Nov 13 to shareholders of record as of Oct 29.
El Paso, TX-based Western Refining is an independent refiner and marketer of refined petroleum products in the Southwestern and Mid-Atlantic regions of the U.S. A major advantage for the company is its proprietary access to pipelines, which inhibits lower-cost competitors from supplying Western Refining's key markets. The company also has a shareholder friendly financial policy and undertakes initiatives that helps to improve reliability while reduce operating costs.
Moreover, the recent decline in crude price sets a favorable environment for refiners like Western Refining before the earnings season. While most energy companies are in the red, earnings estimates for the current quarter as well as current year are moving north for Western Refining. This gives the company an earnings ESP of +0.73%. The Zacks Consensus Estimate for the third quarter is currently pegged at $1.37 per share.
However, the narrowing spread between Brent and WTI crude prices is expected to somewhat dampen the positives. Western Refining is slated to release third-quarter earnings before the opening bell on Nov 4.
Currently, Western Refining carries a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. market in the next one to three months.
Meanwhile, one could consider better-ranked players from the same industry such as CVR Refining, LP (CVRR), Murphy USA Inc. (MUSA) and Alon USA Energy, Inc. (ALJ). While CVR Refining and Murphy USA sport a Zacks Rank #1 (Strong Buy), Alon USA holds a Zacks Rank #2 (Buy).
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