Marathon Petroleum Corp. announced a two-for-one stock split after more than doubling in value since being spun off by Marathon Oil Corp. four years ago.
“We believe the stock split will make our shares more affordable for a wider range of investors,” Gary R. Heminger, chief executive officer of the Findlay, Ohio-based refining company, said in a statement Wednesday. The shares closed yesterday at $102.51.
Valuations of refineries in the U.S. have surged as more advanced extraction technology has caused a boom in North American oil production. Because most crude oil produced in the U.S. cannot be exported, it’s being sent for processing at domestic facilities.
Marathon Petroleum, which is scheduled to release first-quarter results Thursday, has gained 14 percent this year. The company reported fourth-quarter results in February that were more than double analysts’ estimates as gasoline prices fell more slowly than the drop in crude.
“Refiners’ continued strong free cash flow generation may mean capacity for continuing share buybacks and dividends,” Gurpal Dosanjh and Vincent Piazza, analysts for Bloomberg Intelligence, wrote in an April 24 report.
The split will be distributed on June 10 to shareholders of record as of the end of May 20. The company’s board also approved maintaining its 50-cent dividend, on a pre-split business, it said in the statement.
“It is definitely reflective of how well the stock has done and management may see the $100 level as the point where people may think the stock looks expensive,” Brad Heffern, an analyst for RBC Capital Markets, said in an e-mail.
BlackRock Inc. is the company’s largest shareholder, according to data compiled by Bloomberg.