8 Best Oil Refinery Stocks To Invest In

06. Delek US Holdings, Inc. (NYSE:DK)

Number of Hedge Fund Holders: 26

Delek US Holdings, Inc. (NYSE:DK) is a prominent player in the oil refining industry, making it an ideal candidate for inclusion in a list of the best oil refinery stocks to invest in. The company operates through three main segments: Refining, Logistics, and Retail. Delek US Holdings, Inc. (NYSE:DK) refining segment focuses on processing crude oil and other feedstocks to produce gasoline, diesel fuel, aviation fuel, asphalt, and various other petroleum products. The company’s refining operations span multiple locations, including refineries in Texas, Arkansas, and Louisiana, making it a significant contributor to the U.S. energy infrastructure.

Delek US Holdings, Inc. (NYSE:DK) recent financial performance reflects its resilience in a challenging market environment. During the second quarter of 2024, the company reported adjusted EBITDA of $108 million, demonstrating strong operational efficiency despite a lower margin environment. Delek’s refining segment recorded a record throughput of 316,000 barrels per day, supported by the company’s focus on safe and reliable operations. The company’s Big Spring refinery showed notable improvement, achieving production margins of $8.92 per barrel, while the Krotz Springs refinery maintained a production margin of $7.02 per barrel. These figures indicate Delek US Holdings, Inc. (NYSE:DK) ability to optimize its refining operations and maintain a favorable cost structure.

Delek US Holdings, Inc. (NYSE:DK) strategic initiatives are further enhancing its financial position. The company recently announced the sale of its retail business for approximately $385 million, which will be used to strengthen its balance sheet and return value to shareholders. Delek also made a series of acquisitions, including the purchase of H2O Midstream for around $160 million in cash and $70 million in convertible preferred shares. This transaction is expected to be immediately accretive to EBITDA and free cash flow, further positioning Delek US Holdings, Inc. (NYSE:DK) as a key player in the midstream sector.

The company’s robust cost reduction efforts have led to over $100 million in savings, surpassing initial targets and making Delek structurally leaner and more profitable. Delek US Holdings, Inc. (NYSE:DK) commitment to shareholder returns is also evident, with the company increasing its dividend to $0.25 per share. This strong financial performance, combined with strategic acquisitions and a focus on cost optimization, makes Delek US Holdings, Inc. (NYSE:DK) US Holdings a compelling investment in the oil refining sector.