DINO - HF Sinclair: This Dinosaur Has No Teeth

2024-02-23 22:10:45 ET

Summary

• DINO has the highest operating cost of the five refinery companies analyzed.
• Headwinds will result when the Trans Mountain Pipeline enters commercial service in the coming weeks.
• DINO's valuation is one of the cheapest in the peer group, but there are better value plays inside of the peer group.
• With an average sized dividend, headwinds, and high operating costs, investors were encouraged to take their money elsewhere.

Thesis

This article is my initial coverage HF Sinclair ( DINO ) despite the company coming across my path on several occasions. In the past, I would glance through the slide decks and honestly never found anything that stood out about the company. That attitude does not follow suit with that of an astute investor. An astute investor follows the cash flow, not shiny objects.

With that thought in mind, I decided to take a look under the hood of the $10.5 billion dinosaur. If you have read any of my past articles in the refining sector, you will probably know I lean heavily in favor of those companies that have a diversified business portfolio. DINO's midstream and lubricants account for 22% of 2023 operating income. This checked a very big box for me so I decided to dig in some more....

For further details see: