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Strong Buy Rating On An Energy Stock With 7% Dividend And 20% Upside Potential

Published Fri, 27 Jul 2018 10:57:59 -0400 on Seeking Alpha

CVR Energy (CVI) is a Texas-based company with oil refining and product manufacturing segments. The company posted a strong earnings report for quarter 2; $0.59 per share on net sales of over $1.9 million compared to a net loss of $0.12 per share on sales of $1.4 million in the same quarter last year. The CEO indicated that these profits were negatively impacted by down time in two of its processing plants, but quarter 3 is off to a promising start.

The company had previously increased its dividend by 50% to $3.00 per share (on an annual basis) on May 29, 2018. To me, that indicates a possible buy. The previous dividend was $2 per annum. At this writing on July 26, the stock was selling for $38.85, giving a 7.98% annual yield. The stock is up strongly today on good volume. One analyst predicts a likely upside to $46. The 52 week high was 47.67 and the year's low was 16.75, making this a somewhat volatile stock with considerable downside potential as well.
I would consider this stock as a good candidate for near term trading, especially to collect the upcoming dividend by August 2, but not as a long term investment. Market cap is 3.3 billion, recent p/e was 11.7. Profit margin was 8.7%, well below industry average, as was price to cash flow at 6.6. Return on equity was better at 32%, but still modest for the industry. Book value is 10.38. Cash flow from operations (54.2 million) is much lower than net income of 278.4 million. Generally this indicates that earnings... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
CVR ENERGY 41.02   10.5 3.92 3.00 7.06


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