Dividend Focus Stock: Fueling Your Portfolio with Growing Dividend Income

Marathon Petroleum's cash flows alone cover dividends and capex, leaving plenty to cover share repurchases.

In this edition of the Dividend Informer, our analysts introduce a new company to coverage, an energy sector business with a high-octane dividend policy.

Marathon Petroleum traces its roots to the Marathon Oil Company, from which it spun off in 2011.

The yield currently sits at 2.3% after the company recently boosted its quarterly dividend 10% to $1.00 per share.

In 2018, the company acquired Andeavor (formerly known as Tesoro Corporation), which created the largest refining system in the United States and significantly expanded its geographic footprint into the West Coast and Mid-Continent regions.

In 2021, the company sold its Speedway retail convenience store business, generating substantial after-tax proceeds used to strengthen the balance sheet and buy back stock. Marathon retained a 15-year fuel supply agreement preserving a stable outlet for its refined products.

Read on for a description of the company’s fundamentals, overview of operations, key projections for total return from the current price, and the all-important suggested buy price for disciplined dividend investors.