Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Why Murphy Oil Shares Jumped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Murphy Oil (NYSE: MUR  ) climbed as much as 10% after the company announced it would spin off its refining and distribution segment and focus on core functions of exploring and producing oil and gas.

So what: The board also said it would pay out a $500 million one-time dividend of $2.50 per share, and would begin a $1 billion share buyback program. Spinning off the lower-margin downstream should help Murphy unlock greater value, and echoes a similar strategy employed by oil majors like Conoco Phillips (NYSE: COP  ) , which recently separated itself from Phillips 66 (NYSE: PSX  ) , its former refining division.

Now what: Considering all the moves, shareholders might question why the stock didn't jump even higher. At a market cap near $12 billion, the buybacks alone should boost the share price by about 8%, and the dividend windfall adds another $2.50, yet shares were only up about $5 near the closing bell. Investors may want to jump on board before Nov. 16, the dividend date of record, to take advantage of the special offer.

Want to keep tabs on Murphy Oil? Just add the stock to your Watchlist here.

Jeremy Bowman has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2060236, ~/Articles/ArticleHandler.aspx, 10/23/2016 6:12:02 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 1 day ago Sponsored by:
DOW 18,145.71 -16.64 -0.09%
S&P 500 2,141.16 -0.18 -0.01%
NASD 5,257.40 15.57 0.30%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/21/2016 4:00 PM
COP $41.54 Up +0.05 +0.12%
ConocoPhillips CAPS Rating: ****
MUR $29.21 Down -0.14 -0.48%
Murphy Oil CAPS Rating: ***