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CLMT could break out at any point once integration finishes. |
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Released on Wednesday, June 13th, 2012, 2:00 PM ET
Pittsburgh, PA (SpeculatingStocks) - Oil these days has everybody writhing whether that is from pain at the pump or from fat returns on futures. Calumet Specialty Products Partners, L.P (NASDAQ:CLMT) specializes in turning that crude form into truly special viscous materials. Used in sports cars, house lubrication, petroleum, and waxes, CLMT announced on June the 6th that it had signed an agreement to purchase Royal Purple Company, a producer of high-performance synthetic oils.
Regarding Royal Purple's roots, it started small and has since built quite the following, but perhaps even more enticing are some select product formulations which will fit nicely into the Calumet business repertoire. Furthermore, this mixing of companies melds together a powerfully combustible package: reducing costs, overhead and bringing Royal Purple out of disadvantages of small-business and into the realm of economies of scale.
But don't worry, those sought after oil-baron dividends won't elude you either, as CLMT has a history of paying rather large dividends. At roughly 10% average share price in annual yield, CLMT pays $0.50 per share in dividends on a quarterly basis—now how's that for cash-cow profits.
If it's appreciation you are after, have no fear, CLMT is currently at a low price point in the company's recent historical price ranges. At the lower end of its relative trading range this $1.18 billion mid-cap company is trading at $22.83 per share (1:27 PM, June 13th, 2012). It holds earnings of about $1.74 per share, with considerable volume to allow easy access in and out of the firm. It's also not extremely volatile with a beta of only 0.44, compared to the market.
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