- Murphy USA was one of the few rare companies to actually initiate their first dividends during the turmoil of 2020 when many others were being reduced.
- Even though their dividend yield is currently only very low at less than 1%, they have the makings of a future solid dividend investment.
- They consistently produce ample free cash flow and have a healthy financial position that sports only moderate leverage with strong liquidity.
- The one problem arises with how they utilize this cash flow, which is heavily focused on share buybacks and sadly these could be short-sighted given the uncertain outlook for their fossil fuel-based operations.
- Since this largely negates the appeal of their otherwise desirable fundamental financial performance, I believe that only a neutral rating is appropriate.
For further details see:
Murphy USA: The Makings Of A Future Solid Dividend Investment, But One Problem Remains