Delek US Holdings, Inc. (DK)

[Timothy Smith]

Delek is the a small refiner with two refineries, in Tyler, Texas and El Dorado, Arkansas. It directly benefits from the improving Gulf Coast crack spread. In addition to refining, it also has two divisions that also supply, transport and retail so it is more diversified downstream than some of the others on this screen. The earnings of Delek took a hit when its Tyler plant had to go down for some extended maintenance in 2010. It is now up and running and earnings are accelerating.

Those earnings now report at $3.41 a share for a 7.6 PE Ratio. The recent closing price was at $26.02, at the top end of its $9.41-$27.41 52-week trading range. It pays $0.0375 quarterly dividend which comes out to another thin regular yield of 0.59%. However, that is somewhat misleading as it recently declared a $0.10 special dividend

With today's special dividend announcement, our Board continues its long-standing commitment to return value to our shareholders. Within the last twelve months, we have announced four special dividends and four regular dividends totaling an aggregate of $0.62 per share.

These special dividends actually bump up the yield to 2.3% - still nothing to thump your chest about. I do expect the dividend to increase in the next six months. With a reasonable balance sheet, improving earnings and a willingness of the board to reward shareowners, this can be an excellent long-term holding. However, its tiny size makes it more mercurial.