MPC -- Buyback Heavy, Dividend Light -- Michael Fitzsimmons -- April 22, 2022

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• Marathon Petroleum, the largest refiner in the United States, will certainly be a beneficiary of the current macro environment.
• The relatively low price of domestic natural gas is a competitive advantage as compared to foreign refiners - especially those in Europe.
• Sanctions on Russian heavy crude will also likely lead to a boost in global diesel prices, another tailwind for MPC.
• However, for the ordinary shareholder, MPC will be spending much more on share buybacks (at high prices) as compared to dividends directly into their pockets.

The merger of Marathon Petroleum and Endeavor in 2018 created the largest US refiner with facilities on the Gulf Coast, the Mid-Continent, and the West Coast. 

Such a broad and geographically diverse footprint enables MPC to optimize feedstock and export refined products to the global market. 

Given the relatively low cost of domestic natural gas as compared to much of the rest of the world (and especially Europe), those exports are at a competitive advantage. Meantime, sanctions on Russian oil exports are pushing up the price of diesel in many parts of the world - another tailwind for MPC. However, despite the relatively bullish macro-environment, it would appear that MPC will continue to greatly over-emphasize share buybacks, as compared to dividends directly into the pockets of its ordinary shareholders.

Disclaimer: this is not an investment site.  Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here.