PBF Energy (NYSE:PBF) Inc. is set to increase its periodic dividend by 25%, raising it to $0.25 from the previous year's $0.20, yielding a modest 1.7%. This decision comes in spite of an anticipated significant drop in earnings per share (EPS) over the next year.
The company's robust earnings sufficiently cover the dividend, indicating effective reinvestment for business growth. However, the expected 53.7% decrease in EPS in the coming year could result in a payout ratio of 7.6%.
PBF Energy's dividend history shows instability, with at least one cut over the past decade and an average annual decrease of approximately 4%. This has resulted in a reduction in the annual total from $1.20 in 2013 to a recent $0.80.
In spite of this unstable dividend history, PBF Energy has demonstrated rapid earnings growth over the past five years, with EPS increasing annually by 29%. This consistent growth and low payout ratio suggest efficient reinvestment into its operations, indicating a promising future for the company.
Despite the anticipated earnings decline in the coming year, PBF Energy remains a strong income stock due to its growing earnings and substantial cash generation capacity.
InvestingPro Insights
InvestingPro data and tips suggest a promising outlook for PBF Energy Inc. The company's market cap stands at a healthy 5660M USD, with a low P/E ratio of 2.13 as of Q3 2023, indicating the stock may be undervalued. The company's revenue, despite experiencing a slight decrease of 9.49% over the last twelve months as of Q3 2023, remains substantial at 40032.4M USD.
Two key InvestingPro Tips that align with the company's performance are the strong earnings allowing continued dividend payments and the consistently increasing earnings per share. These factors, coupled with the fact that PBF Energy is a prominent player in the Oil, Gas & Consumable Fuels industry, suggest that the company's financial health is stable.
It's also worth noting that PBF Energy's return on assets for the last twelve months as of Q3 2023 is 20.48%, indicating effective use of its resources to generate profits.
For those interested in a more comprehensive analysis, InvestingPro offers a total of 15 tips for PBF Energy. These insights can provide a deeper understanding of the company's financial health and market position, aiding in more informed investment decisions.
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