HF Sinclair Corp (NYSE: DINO): Insights on Upcoming Dividend Runs
This morning, a “Potential Dividend Run Alert” was issued for HF Sinclair Corp (NYSE: DINO) through our DividendChannel.com Dividend Alerts service (a complimentary email alert feature). Let’s examine the details more closely.
Understanding Dividend Runs
What exactly is a “Dividend Run”? This intriguing concept was first introduced to us at a previous ValueForum conference, and it centers around the behavior of a stock on its ex-dividend date.
The ex-dividend date is crucial because it signifies when a buyer will not receive an upcoming dividend. To qualify for the dividend, shares must be bought before this date. Typically, stock prices are expected to decline by the dividend amount on the ex-date, assuming other factors remain stable. This makes sense: if a buyer expects a $0.50 dividend before the ex-date, they would not want to pay the same amount for shares once the dividend has been detached.
Now, consider this: if a stock is predicted to drop by the dividend amount on the ex-date, shouldn’t it be expected to increase beforehand? A continual decline wouldn’t be sustainable for a profitable company that distributes dividends. Therefore, there is often a natural tendency for a stock to appreciate in anticipation of an upcoming dividend—leading to what is known as a potential Dividend Run.
The phrase “sometime” emphasizes that different dividend investors have various strategies regarding timing. Some prefer to invest and then sell on specific dates, while others utilize dollar-cost averaging or hold shares for the dividend income before selling. Others might choose to sell the day before the ex-date, trying to maximize capital gains. A common recommendation has been to buy shares about two weeks (or ten trading days) before the intended sale date.
HF Sinclair’s Dividend Performance
As a case in point, consider HF Sinclair’s $0.50/share dividend that became ex-dividend on 08/21/24. On the last trading day before this date, shares were priced at $47.27, while two weeks earlier, on 08/06/24, they were at $46.13. This indicates that DINO shares appreciated by $1.14 in the two weeks leading up to the dividend announcement.
Reviewing the past four dividends paid by DINO reveals that following this strategy captured a capital gain exceeding the dividend three out of four times, totaling +$3.89 in capital appreciation. This amount surpasses the aggregate dividends paid during the same period, which summed up to $1.95. Here’s the breakdown:
| Ex-Dividend | ——Price 2 Weeks Prior—» | ——Price 1 Day Prior—» | Run Gain/Loss | |||
|---|---|---|---|---|---|---|
| 08/21/24 | 0.5 | 08/06/24 | 46.13 | 08/20/24 | 47.27 | +1.14 |
| 05/21/24 | 0.5 | 05/06/24 | 55.20 | 05/20/24 | 57.24 | +2.04 |
| 02/23/24 | 0.5 | 02/07/24 | 57.15 | 02/22/24 | 58.38 | +1.23 |
| 11/15/23 | 0.45 | 10/31/23 | 55.38 | 11/14/23 | 54.86 | -0.52 |
| Div Total: | 1.95 | “Divvy Run” Total: | +3.89 | |||
Looking Ahead
In about two weeks, HF Sinclair Corp (NYSE: DINO) will go ex-dividend for its latest $0.50/share dividend. Will the Dividend Run history repeat itself?
Upcoming Dividend: $0.50/share
Ex-Div Date: 11/21/24
Payment Date: 12/04/24
Dividend Frequency: Quarterly
Full DINO Dividend History »
While past performance does not guarantee future results, one thing is certain: for investors who utilize Dividend Runs, DINO is a notable stock to watch with its implied annualized yield of 5.00%.
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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
