Intrinsic value of HollyFrontier - HFC

Previous Close

$71.02

  Intrinsic Value

$743.60

stock screener

  Rating & Target

str. buy

+947%

Previous close

$71.02

 
Intrinsic value

$743.60

 
Up/down potential

+947%

 
Rating

str. buy

We calculate the intrinsic value of HFC stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  -20.41
  35.30
  32.27
  29.54
  27.09
  24.88
  22.89
  21.10
  19.49
  18.04
  16.74
  15.56
  14.51
  13.56
  12.70
  11.93
  11.24
  10.61
  10.05
  9.55
  9.09
  8.68
  8.32
  7.98
  7.69
  7.42
  7.18
  6.96
  6.76
  6.59
  6.43
Revenue, $m
  10,536
  19,282
  25,504
  33,038
  41,988
  52,435
  64,438
  78,036
  93,247
  110,072
  128,496
  148,497
  170,041
  193,095
  217,622
  243,587
  270,963
  299,725
  329,857
  361,351
  394,209
  428,441
  464,068
  501,118
  539,632
  579,656
  621,247
  664,472
  709,403
  756,122
  804,720
Variable operating expenses, $m
 
  13,981
  18,406
  23,764
  30,129
  37,558
  46,094
  55,764
  66,582
  78,547
  91,650
  105,605
  120,926
  137,321
  154,764
  173,229
  192,698
  213,152
  234,581
  256,978
  280,345
  304,690
  330,026
  356,375
  383,764
  412,227
  441,806
  472,545
  504,498
  537,723
  572,284
Fixed operating expenses, $m
 
  3,078
  3,146
  3,215
  3,286
  3,358
  3,432
  3,508
  3,585
  3,664
  3,744
  3,827
  3,911
  3,997
  4,085
  4,175
  4,266
  4,360
  4,456
  4,554
  4,654
  4,757
  4,862
  4,969
  5,078
  5,190
  5,304
  5,420
  5,540
  5,661
  5,786
Total operating expenses, $m
  10,644
  17,059
  21,552
  26,979
  33,415
  40,916
  49,526
  59,272
  70,167
  82,211
  95,394
  109,432
  124,837
  141,318
  158,849
  177,404
  196,964
  217,512
  239,037
  261,532
  284,999
  309,447
  334,888
  361,344
  388,842
  417,417
  447,110
  477,965
  510,038
  543,384
  578,070
Operating income, $m
  -109
  2,223
  3,952
  6,059
  8,573
  11,519
  14,912
  18,764
  23,080
  27,861
  33,102
  39,065
  45,204
  51,777
  58,773
  66,183
  73,999
  82,212
  90,820
  99,819
  109,209
  118,994
  129,180
  139,775
  150,790
  162,239
  174,138
  186,506
  199,365
  212,737
  226,650
EBITDA, $m
  254
  3,422
  5,452
  7,923
  10,870
  14,320
  18,293
  22,801
  27,853
  33,446
  39,577
  46,238
  53,417
  61,103
  69,284
  77,949
  87,086
  96,689
  106,752
  117,272
  128,249
  139,688
  151,595
  163,979
  176,854
  190,236
  204,144
  218,600
  233,629
  249,258
  265,518
Interest expense (income), $m
  54
  135
  237
  362
  514
  695
  905
  1,148
  1,422
  1,729
  2,068
  2,440
  2,843
  3,278
  3,743
  4,238
  4,762
  5,314
  5,894
  6,502
  7,138
  7,800
  8,491
  9,210
  9,957
  10,734
  11,542
  12,381
  13,253
  14,159
  15,102
Earnings before tax, $m
  -172
  2,088
  3,715
  5,697
  8,059
  10,824
  14,006
  17,616
  21,658
  26,132
  31,034
  36,625
  42,361
  48,499
  55,030
  61,945
  69,237
  76,898
  84,926
  93,316
  102,072
  111,194
  120,689
  130,565
  140,833
  151,504
  162,596
  174,126
  186,112
  198,578
  211,548
Tax expense, $m
  19
  564
  1,003
  1,538
  2,176
  2,922
  3,782
  4,756
  5,848
  7,056
  8,379
  9,889
  11,437
  13,095
  14,858
  16,725
  18,694
  20,763
  22,930
  25,195
  27,559
  30,022
  32,586
  35,253
  38,025
  40,906
  43,901
  47,014
  50,250
  53,616
  57,118
Net income, $m
  -260
  1,524
  2,712
  4,159
  5,883
  7,901
  10,225
  12,860
  15,811
  19,077
  22,655
  26,737
  30,923
  35,404
  40,172
  45,220
  50,543
  56,136
  61,996
  68,121
  74,512
  81,172
  88,103
  95,313
  102,808
  110,598
  118,695
  127,112
  135,862
  144,962
  154,430

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  1,135
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  9,436
  14,465
  19,133
  24,785
  31,499
  39,336
  48,340
  58,542
  69,953
  82,574
  96,396
  111,400
  127,563
  144,857
  163,257
  182,736
  203,273
  224,850
  247,454
  271,081
  295,731
  321,411
  348,138
  375,933
  404,825
  434,850
  466,052
  498,478
  532,185
  567,234
  603,691
Adjusted assets (=assets-cash), $m
  8,301
  14,465
  19,133
  24,785
  31,499
  39,336
  48,340
  58,542
  69,953
  82,574
  96,396
  111,400
  127,563
  144,857
  163,257
  182,736
  203,273
  224,850
  247,454
  271,081
  295,731
  321,411
  348,138
  375,933
  404,825
  434,850
  466,052
  498,478
  532,185
  567,234
  603,691
Revenue / Adjusted assets
  1.269
  1.333
  1.333
  1.333
  1.333
  1.333
  1.333
  1.333
  1.333
  1.333
  1.333
  1.333
  1.333
  1.333
  1.333
  1.333
  1.333
  1.333
  1.333
  1.333
  1.333
  1.333
  1.333
  1.333
  1.333
  1.333
  1.333
  1.333
  1.333
  1.333
  1.333
Average production assets, $m
  4,361
  9,313
  12,318
  15,958
  20,280
  25,326
  31,123
  37,691
  45,038
  53,165
  62,064
  71,724
  82,130
  93,265
  105,111
  117,653
  130,875
  144,767
  159,321
  174,533
  190,403
  206,937
  224,145
  242,040
  260,642
  279,974
  300,062
  320,940
  342,642
  365,207
  388,680
Working capital, $m
  1,768
  559
  740
  958
  1,218
  1,521
  1,869
  2,263
  2,704
  3,192
  3,726
  4,306
  4,931
  5,600
  6,311
  7,064
  7,858
  8,692
  9,566
  10,479
  11,432
  12,425
  13,458
  14,532
  15,649
  16,810
  18,016
  19,270
  20,573
  21,928
  23,337
Total debt, $m
  2,235
  4,381
  6,706
  9,521
  12,864
  16,767
  21,251
  26,332
  32,014
  38,300
  45,183
  52,655
  60,704
  69,317
  78,480
  88,181
  98,408
  109,153
  120,410
  132,176
  144,452
  157,241
  170,550
  184,392
  198,781
  213,733
  229,272
  245,420
  262,206
  279,660
  297,816
Total liabilities, $m
  4,754
  7,203
  9,528
  12,343
  15,686
  19,589
  24,074
  29,154
  34,836
  41,122
  48,005
  55,477
  63,526
  72,139
  81,302
  91,003
  101,230
  111,975
  123,232
  134,998
  147,274
  160,063
  173,373
  187,214
  201,603
  216,555
  232,094
  248,242
  265,028
  282,482
  300,638
Total equity, $m
  4,681
  7,261
  9,605
  12,442
  15,812
  19,747
  24,267
  29,388
  35,116
  41,452
  48,391
  55,923
  64,037
  72,718
  81,955
  91,734
  102,043
  112,875
  124,222
  136,083
  148,457
  161,348
  174,765
  188,718
  203,222
  218,295
  233,958
  250,236
  267,157
  284,751
  303,053
Total liabilities and equity, $m
  9,435
  14,464
  19,133
  24,785
  31,498
  39,336
  48,341
  58,542
  69,952
  82,574
  96,396
  111,400
  127,563
  144,857
  163,257
  182,737
  203,273
  224,850
  247,454
  271,081
  295,731
  321,411
  348,138
  375,932
  404,825
  434,850
  466,052
  498,478
  532,185
  567,233
  603,691
Debt-to-equity ratio
  0.477
  0.600
  0.700
  0.770
  0.810
  0.850
  0.880
  0.900
  0.910
  0.920
  0.930
  0.940
  0.950
  0.950
  0.960
  0.960
  0.960
  0.970
  0.970
  0.970
  0.970
  0.970
  0.980
  0.980
  0.980
  0.980
  0.980
  0.980
  0.980
  0.980
  0.980
Adjusted equity ratio
  0.427
  0.502
  0.502
  0.502
  0.502
  0.502
  0.502
  0.502
  0.502
  0.502
  0.502
  0.502
  0.502
  0.502
  0.502
  0.502
  0.502
  0.502
  0.502
  0.502
  0.502
  0.502
  0.502
  0.502
  0.502
  0.502
  0.502
  0.502
  0.502
  0.502
  0.502

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -260
  1,524
  2,712
  4,159
  5,883
  7,901
  10,225
  12,860
  15,811
  19,077
  22,655
  26,737
  30,923
  35,404
  40,172
  45,220
  50,543
  56,136
  61,996
  68,121
  74,512
  81,172
  88,103
  95,313
  102,808
  110,598
  118,695
  127,112
  135,862
  144,962
  154,430
Depreciation, amort., depletion, $m
  363
  1,200
  1,500
  1,864
  2,297
  2,801
  3,381
  4,038
  4,772
  5,585
  6,475
  7,172
  8,213
  9,326
  10,511
  11,765
  13,088
  14,477
  15,932
  17,453
  19,040
  20,694
  22,414
  24,204
  26,064
  27,997
  30,006
  32,094
  34,264
  36,521
  38,868
Funds from operations, $m
  548
  2,724
  4,213
  6,023
  8,180
  10,702
  13,605
  16,898
  20,583
  24,662
  29,130
  33,909
  39,136
  44,731
  50,683
  56,985
  63,630
  70,613
  77,928
  85,574
  93,553
  101,865
  110,518
  119,517
  128,872
  138,596
  148,701
  159,206
  170,126
  181,483
  193,298
Change in working capital, $m
  -54
  146
  180
  219
  260
  303
  348
  394
  441
  488
  534
  580
  625
  669
  711
  753
  794
  834
  874
  913
  953
  993
  1,033
  1,074
  1,117
  1,161
  1,206
  1,254
  1,303
  1,355
  1,409
Cash from operations, $m
  602
  2,578
  4,032
  5,805
  7,920
  10,400
  13,257
  16,503
  20,142
  24,174
  28,595
  33,329
  38,512
  44,062
  49,972
  56,232
  62,837
  69,778
  77,054
  84,661
  92,600
  100,873
  109,484
  118,442
  127,755
  137,435
  147,495
  157,952
  168,823
  180,128
  191,889
Maintenance CAPEX, $m
  0
  -688
  -931
  -1,232
  -1,596
  -2,028
  -2,533
  -3,112
  -3,769
  -4,504
  -5,316
  -6,206
  -7,172
  -8,213
  -9,326
  -10,511
  -11,765
  -13,088
  -14,477
  -15,932
  -17,453
  -19,040
  -20,694
  -22,414
  -24,204
  -26,064
  -27,997
  -30,006
  -32,094
  -34,264
  -36,521
New CAPEX, $m
  -480
  -2,430
  -3,005
  -3,639
  -4,323
  -5,046
  -5,798
  -6,568
  -7,347
  -8,126
  -8,899
  -9,660
  -10,406
  -11,135
  -11,846
  -12,542
  -13,222
  -13,892
  -14,554
  -15,212
  -15,870
  -16,534
  -17,208
  -17,895
  -18,602
  -19,332
  -20,089
  -20,877
  -21,702
  -22,565
  -23,472
Cash from investing activities, $m
  -802
  -3,118
  -3,936
  -4,871
  -5,919
  -7,074
  -8,331
  -9,680
  -11,116
  -12,630
  -14,215
  -15,866
  -17,578
  -19,348
  -21,172
  -23,053
  -24,987
  -26,980
  -29,031
  -31,144
  -33,323
  -35,574
  -37,902
  -40,309
  -42,806
  -45,396
  -48,086
  -50,883
  -53,796
  -56,829
  -59,993
Free cash flow, $m
  -200
  -541
  96
  934
  2,002
  3,326
  4,927
  6,823
  9,026
  11,543
  14,380
  17,462
  20,933
  24,714
  28,799
  33,180
  37,849
  42,799
  48,023
  53,517
  59,276
  65,298
  71,583
  78,132
  84,949
  92,039
  99,409
  107,068
  115,027
  123,298
  131,896
Issuance/(repayment) of debt, $m
  1,188
  1,882
  2,325
  2,815
  3,344
  3,903
  4,484
  5,080
  5,683
  6,286
  6,883
  7,472
  8,049
  8,613
  9,163
  9,701
  10,227
  10,745
  11,257
  11,766
  12,276
  12,789
  13,310
  13,842
  14,388
  14,953
  15,538
  16,148
  16,786
  17,454
  18,156
Issuance/(repurchase) of shares, $m
  -8
  366
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  1,077
  2,248
  2,325
  2,815
  3,344
  3,903
  4,484
  5,080
  5,683
  6,286
  6,883
  7,472
  8,049
  8,613
  9,163
  9,701
  10,227
  10,745
  11,257
  11,766
  12,276
  12,789
  13,310
  13,842
  14,388
  14,953
  15,538
  16,148
  16,786
  17,454
  18,156
Total cash flow (excl. dividends), $m
  878
  1,708
  2,420
  3,748
  5,345
  7,229
  9,411
  11,903
  14,708
  17,829
  21,263
  24,934
  28,982
  33,327
  37,962
  42,880
  48,076
  53,544
  59,281
  65,283
  71,552
  78,087
  84,893
  91,974
  99,337
  106,992
  114,948
  123,217
  131,813
  140,752
  150,051
Retained Cash Flow (-), $m
  572
  -1,890
  -2,343
  -2,837
  -3,370
  -3,934
  -4,520
  -5,121
  -5,728
  -6,336
  -6,939
  -7,532
  -8,114
  -8,682
  -9,237
  -9,779
  -10,309
  -10,832
  -11,347
  -11,861
  -12,374
  -12,892
  -13,417
  -13,953
  -14,504
  -15,073
  -15,663
  -16,278
  -16,921
  -17,594
  -18,301
Prev. year cash balance distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  43
  58
  77
  99
  126
  157
  193
  234
  280
  330
  385
  445
  510
  579
  653
  731
  813
  899
  990
  1,084
  1,183
  1,285
  1,392
  1,503
  1,619
  1,739
  1,864
  1,993
  2,128
  2,268
Cash available for distribution, $m
 
  -182
  77
  911
  1,975
  3,294
  4,891
  6,782
  8,980
  11,493
  14,325
  17,402
  20,868
  24,645
  28,725
  33,102
  37,767
  42,713
  47,933
  53,423
  59,177
  65,195
  71,476
  78,021
  84,834
  91,919
  99,284
  106,939
  114,892
  123,158
  131,750
Discount rate, %
 
  4.80
  5.04
  5.29
  5.56
  5.83
  6.13
  6.43
  6.75
  7.09
  7.45
  7.82
  8.21
  8.62
  9.05
  9.50
  9.98
  10.48
  11.00
  11.55
  12.13
  12.74
  13.37
  14.04
  14.74
  15.48
  16.25
  17.07
  17.92
  18.82
  19.76
PV of cash for distribution, $m
 
  -174
  70
  780
  1,591
  2,481
  3,424
  4,384
  5,324
  6,203
  6,985
  7,603
  8,097
  8,412
  8,540
  8,481
  8,244
  7,850
  7,323
  6,694
  5,995
  5,259
  4,518
  3,800
  3,127
  2,516
  1,978
  1,518
  1,137
  830
  590
Current shareholders' claim on cash, %
  100
  97.2
  97.2
  97.2
  97.2
  97.2
  97.2
  97.2
  97.2
  97.2
  97.2
  97.2
  97.2
  97.2
  97.2
  97.2
  97.2
  97.2
  97.2
  97.2
  97.2
  97.2
  97.2
  97.2
  97.2
  97.2
  97.2
  97.2
  97.2
  97.2
  97.2

HollyFrontier Corporation is an independent petroleum refiner. The Company produces various light products, such as gasoline, diesel fuel, jet fuel, specialty lubricant products, and specialty and modified asphalt. It segments include Refining and Holly Energy Partners, L.P. (HEP). The Refining segment includes the operations of the Company's El Dorado, Kansas (the El Dorado Refinery); refinery facilities located in Tulsa, Oklahoma (collectively, the Tulsa Refineries); a refinery in Artesia, New Mexico that is operated in conjunction with crude oil distillation and vacuum distillation and other facilities situated 65 miles away in Lovington, New Mexico (collectively, the Navajo Refinery); refinery located in Cheyenne, Wyoming (the Cheyenne Refinery); a refinery in Woods Cross, Utah (the Woods Cross Refinery), and HollyFrontier Asphalt Company (HFC Asphalt). The HEP segment involves all of the operations of HEP. HEP is a limited partnership, which owns and operates logistic assets.

FINANCIAL RATIOS  of  HollyFrontier (HFC)

Valuation Ratios
P/E Ratio -48.4
Price to Sales 1.2
Price to Book 2.7
Price to Tangible Book
Price to Cash Flow 20.9
Price to Free Cash Flow 103.2
Growth Rates
Sales Growth Rate -20.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -29%
Cap. Spend. - 3 Yr. Gr. Rate 2.5%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 47.7%
Total Debt to Equity 47.7%
Interest Coverage -2
Management Effectiveness
Return On Assets -2.2%
Ret/ On Assets - 3 Yr. Avg. 3.3%
Return On Total Capital -3.9%
Ret/ On T. Cap. - 3 Yr. Avg. 3.9%
Return On Equity -5.2%
Return On Equity - 3 Yr. Avg. 4.5%
Asset Turnover 1.2
Profitability Ratios
Gross Margin 19.5%
Gross Margin - 3 Yr. Avg. 17.4%
EBITDA Margin 2.3%
EBITDA Margin - 3 Yr. Avg. 6.3%
Operating Margin -1%
Oper. Margin - 3 Yr. Avg. 3.6%
Pre-Tax Margin -1.6%
Pre-Tax Margin - 3 Yr. Avg. 3.3%
Net Profit Margin -2.5%
Net Profit Margin - 3 Yr. Avg. 1.5%
Effective Tax Rate -11%
Eff/ Tax Rate - 3 Yr. Avg. 17.6%
Payout Ratio -90%

HFC stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the HFC stock intrinsic value calculation we used $14251 million for the last fiscal year's total revenue generated by HollyFrontier. The default revenue input number comes from 2016 income statement of HollyFrontier. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our HFC stock valuation model: a) initial revenue growth rate of 35.3% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.8%, whose default value for HFC is calculated based on our internal credit rating of HollyFrontier, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of HollyFrontier.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of HFC stock the variable cost ratio is equal to 73%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $3012 million in the base year in the intrinsic value calculation for HFC stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for HollyFrontier.

Corporate tax rate of 27% is the nominal tax rate for HollyFrontier. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the HFC stock is equal to 0.3%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for HFC are equal to 48.3%.

Life of production assets of 10 years is the average useful life of capital assets used in HollyFrontier operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for HFC is equal to 2.9%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $5371 million for HollyFrontier - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 176 million for HollyFrontier is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of HollyFrontier at the current share price and the inputted number of shares is $12.5 billion.

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▶ HollyFrontier Corporation Announces Regular Cash Dividend   [May-09-18 04:15PM  Business Wire]
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Financial statements of HFC
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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