12 Best Oil Refinery Stocks To Invest In According to Analysts

3. HF Sinclair Corporation (NYSE:DINO)

Stock Upside Potential: 21.6%

HF Sinclair Corporation (NYSE:DINO) is an independent petroleum refiner in the United States with operations throughout the mid-continent, southwestern, and Rocky Mountain regions. The company operates seven complex refineries with an annual average crude oil capacity of approximately 678,000 barrels per day.

HF Sinclair Corporation (NYSE:DINO) reported EPS of $0.51 in Q3 of 2024, beating analysts’ estimates by $0.18, as higher fuel sales and a strong midstream segment offset a margin slump, particularly in the West and Mid-Continent regions. The company continued to prove its reliability in the refining business and completed the turnaround at its Parker refinery on time and on budget in Q3, in addition to setting a quarterly record for premium production at its Woods Cross refinery. Due to reduced turnaround activities, HF Sinclair’s refinery utilization averaged 101.2% during the quarter, compared with 88.8% in the same period of 2023, leading to a 3.2% YoY increase in refined product sales. The company returned $222 million in cash to its shareholders in Q3 and also announced a quarterly dividend of $0.50 per share, demonstrating its continued commitment to shareholder returns.

The refining industry faced a challenging macro environment in 2024, leading the stock of HF Sinclair Corporation (NYSE:DINO) to plunge by more than 36% over the last year. Longleaf Partners, managed by Southeastern Asset Management, stated the following regarding HF Sinclair Corporation (NYSE:DINO) in its Q4 2024 investor letter:

“HF Sinclair Corporation (NYSE:DINO) – Energy infrastructure company HF Sinclair, which owns refining, midstream, specialty chemicals, marketing and renewable fuels assets, detracted in the quarter and for the year. The company owns unique assets that are protected from competition and has a great culture focused on value per share growth and realization. We had the opportunity to purchase this strong company in the quarter due to the recent refining downcycle and oil price volatility. We know HF Sinclair well having owned it before in 2015 in the Small-Cap Fund and having followed it since we first visited the company in 2009. As is typical in this industry, quarterly volatility in spread pricing can weigh on the share price in the short term, which is what happened this quarter. We were encouraged to see significant insider buying throughout the quarter as we were buying alongside them.”