CVR Energy (CVI)
CVR Energy (CVI) stock is down 9% since Jan. 2. CVI stock has a lofty dividend yield of 8%, and its valuation is attractive now with a puny forward P/E of 9.4. CVI shares soared by more than 3% on Thursday after the company reported fourth-quarter and full-year earnings.
Although CVI’s fourth-quarter earnings swung from 46 cents per share in 2012 to a 25-cent-per-share loss in the fourth quarter last year, the results were largely attributable to losses in derivatives because of wider than expected crack spreads. The company did post strong performance in both its refining and fertilizer businesses during the fourth quarter.
CVI is structured into two Managed Limited Partnerships (MLPs): CVR Refining (CVRR) and the nitrogen fertilizer unit CVR Partners (UAN). CVR Energy owns 71% of CVR Refining and 53% of CVR Partners. This is an interesting play in the energy sector, given UAN’s lower cost of ammonia and urea ammonium nitrate and CVRR’s edge as an MLP refiner.