Ex-Dividend Date Ignites Demand for Marathon Oil, Refining Stocks

By Paul Ausick Published Nov 17, 10:10AM EST

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Ex-Dividend Date Ignites Demand for Marathon Oil, Refining Stocks — © William_Potter / iStock via Getty Images

Crude oil traded roughly flat on Monday, settling at $41.34 a barrel. Yet shares of Marathon Petroleum Co. (NYSE: MPC | MPC Price Prediction) and Marathon Oil Corp. (NYSE: MRO) both added more than 8% to their price for no apparent reason.

Marathon Oil, the exploration and production company, traded more than 34 million shares Monday (about 25% above its daily average), while Marathon Petroleum, the refining and marketing company, traded more than 15 million shares, double its daily average.

It’s a timing thing. Tuesday, November 17, is the ex-dividend date for both stocks. Shareholders of record as of Wednesday (the record date) will receive a $0.03 per share quarterly dividend ($0.12 annualized) payment for their Marathon Oil shares. Shareholders of record in Marathon Petroleum will receive a quarterly dividend payment of $0.58 per share ($2.32 annualized), a yield of 5.7% at Monday’s closing price. The annualized yield on Marathon Oil is 2.93%.

Shares of both will no longer trade at those dividend payout levels on Tuesday, and shares purchased on or after Tuesday aren’t guaranteed to receive similar payments.

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Over the past five trading sessions, Marathon Petroleum stock has added about $4.00 per share (nearly 11%) and Marathon Oil shares have risen by $0.57 (about 11.6%). In both cases, gains in the stocks jumped on the final two trading days before the ex-dividend date.

In one sense, just move along, there’s nothing to see here. Marathon Oil shares traded down about 1.2% in Tuesday’s premarket while Marathon Petroleum’s stock traded essentially flat. There’s been no big change in the market for crude or for refined products. Both crude and refined products are trading within a dollar of their prices back in June. Nothing fundamental pumped up the two Marathon stocks on Monday. All the action was related to the pending dividend record date of November 18.

Marathon Oil shares traded at $5.25 on last look, down 3.7%, in a 52-week range of $3.02 to $14.07 and with a consensus 12-month price target of $6.52. The company’s $0.03 per share dividend was reinstated after being suspended earlier this year.

Marathon Petroleum traded at $38.95, down about 1.6% on Tuesday morning, in a 52-week range of $15.26 to $63.89. The price target on the stock is $43.73.

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About the Author Paul Ausick →

Paul Ausick has been writing for a673b.bigscoots-temp.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.

He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.