Credit Suisse Likes These Oil Refiners Now

Credit Suisse (NYSE:CS) released a research note in Barron’s today which favorably reviews Marathon (NYSE:MRO), HollyFrontier (HFC), and CVR Energy (NYSE:CVI).  Creidt Suisse analysts believe that these US refiners are generating better returns from their operations than their global competitors.

Their note reads, in part:

Rising product exports from the U.S. suggest that the U.S. Mid-Continent and Gulf Coast refineries were already well placed among the most globally cost-competitive in the world. Their high complexity allows them to turn cheaper, difficult-to-process heavy crudes into the toughest-specification products in the world. Now, the surge in Canadian bitumen production, rising U.S. shale liquids production and eventually new deepwater Gulf projects will deliver an input crude advantage for the decade to come.

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A quick look at these companies’ fundamentals suggests that they are worth a closer look.

  • Marathon Petroleum Corp. (NYSE:MRO): The shares recently traded at $31.12, up $2.36, or 8.07%, on the day.  The company sports a P/E ratio of 6.02, EPS of $5.16 and a dividend yield of 2.57%.  The shares are trading in the middle of their 52-week range of $26.35 to $47.43, and its market capitalization is $11.09 billion.  About the company: Marathon Petroleum Corporation, together with its subsidiaries, engages in refining, transporting, and marketing petroleum products primarily in the United States and internationally.
  • HollyFrontier (NYSE:HOC): The shares recently traded at $27.65, up $1.31, or 5.01%, on the day.  The company sports a P/E ratio of 8.65, EPS of $3.20 and a dividend yield of 1.27%.  The shares are trading in the middle of their 52-week range of $14.32 to $38.90 and its market capitalization is $5.81 billion.  About the company:  Holly Corporation, through its affiliates, refines, transports, stores and markets petroleum products.  The Company’s refineries produce light products such as gasoline, diesel fuel, and jet fuel which are marketed in the southwestern United States, northern Mexico, and Montana.
  • CVR Energy (NYSE:CVI): The shares recently traded at $20.84, up $0.38, or 1.86%, on the day.  The company sports a P/E ratio of 9.31, EPS of $2.24, and does not pay a dividend.  The shares are trading in the middle of their 52-week range of $8.07 to $29.61.  Its market capitalization is $1.8 billion.  About the company:  CVR Energy, Inc. is an independent refiner and marketer of transportation fuels.  The Company, also through a limited partnership, produces ammonia and urea ammonia nitrate, or UAN, fertilizers.

(Note: Selected financial data are sourced from Google Finance.  All data are assumed to be accurate.)

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