The Best Company to Own Right Now – CVR Refining LP (CVRR): CVR Energy, Inc. (CVI), Icahn Enterprises LP (IEP)

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CVR Energy, Inc. (NYSE: CVI)It is very rare to find a company with high growth and a high dividend. One company that recently went public has both of these traits. After releasing its first earnings report, it is clear that this is a stock everyone should own.

Overview of the Company

CVR Refining LP (NYSE:CVRR), as their name clearly states, is a petroleum refiner in the United States. They make money by buying crude oil and selling the refined products, mainly gasoline and diesel. They are strategically located in the central United States, giving them access to cheap mid-continent local and Canadian crude oils.

Fourth Quarter 2012 Results

CVR Refining LP (NYSE:CVRR)’s fourth quarter was strong and gave insight into how this company is growing. Here’s a summary of how CVR Refining LP (NYSE:CVRR) did in the fourth quarter of 2011:

Net income fell to $54.6 million from $77.5 million
Net sales increased 85.4% to $1.8162 billion
Adjusted EBITDA increased 342.9% to $196.2 million
Operating income increased to $120.4 million from a loss of $11.8 million

Full Year 2012 Results

Investors could not have asked for a better year than the one CVR Refining had in 2012. Here are some of the key statistics:

Net income increased 23.9% to $595.3 million
Net sales increased 74.3% to $8.2817 billion
Adjusted EBITDA increased 103.7% to $1.1762 billion
Operating income increased 117.6% to $993.9 million

The strength in 2012 came from “strong crack spreads, access to price-advantaged crudes, and high operating throughputs,” as stated by management. As free cash flow rises, they will be able to expand operations to increase output and obtain a higher market share. Any doubts people had should be all gone after seeing this report.

Massive Distribution

When CVR Refining LP (NYSE:CVRR) Refining went public in January, they had anticipated paying out $4.72 in dividends for the year. This would have represented a yield of about 18.8%. However, due to stronger financials, they have increased their distribution expectations to between $5.50 and $6.50 for the year. From the IPO price, this would make the stock yield around 22% to 26%.

Management stated, “We expect 2013 to be a rewarding year for the company and its unitholders.” This company is clearly dedicated to returning value to its investors.

Going Forward

For the full year of 2013, analysts currently project earnings to increase 28.3% to $6.31 per share. After the recent blowout quarter, I believe these estimates are much too low and will soon be increased. Sometimes it takes a quarter after going public to get analysts to take a deeper look at a company.

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