A 10% Dividend Growth Story Few Investors Are Watching

| February 11, 2026
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Pure-play energy refiners receive little investor attention. When people think about energy stocks, they usually think of large, global, full-spectrum players like Exxon Mobil (XOM) and Chevron (CVX); however, income-focused investors are aware of midstream companies with attractive yields and growing dividends.

Refining companies, which turn crude oil into fuels, are referred to as downstream energy companies. Pure-play refiners operate in a highly interesting energy subsector. For a refiner, both its inputs (crude oil) and its products (fuels like gasoline and jet fuel) have prices set in the commodity markets. As a result, refiners need to be highly efficient to remain profitable when commodity prices are unfavorable.

There are just three large refining companies:

  • Marathon Petroleum Corp. (MPC), with a $53 billion market cap
  • Phillips 66 (PSX), with a market cap of $57 billion
  • Valero Energy Corp (VLO), with a $55 billion market value

Marathon Petroleum released fourth-quarter and full-year results, with some outstanding numbers. For reference, MPC currently trades for $190 per share.

For 2025, MPC reported net income of $4.0 billion, or $13.22 per share. This was up nicely from $10.08 per share for 2024. Cash from operations totaled $8.3 billion.

Marathon Petroleum’s management is focused on returning cash to investors. For 2025, $4.5 billion was paid out in dividends and share buybacks. From 2020 through 2025, the number of shares outstanding decreased by over 50%. Fewer shares automatically produce growing earnings per share.

Marathon Petroleum has consistently grown its common stock dividend by 10% annually. The company owns more than 60% of MPLX LP (MPLX), an energy midstream company. The growing distributions from MPLX to MPC are expected to fund MPC’s 2026 dividend and standalone capital.

For investors, MPC is a solid dividend growth stock. When profits are high, shares are repurchased, EPS continues to grow, and dividends are increased.

This post originally appeared at Investors Alley.

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Category: Dividend Stocks To Buy?, Dividend Yield

About the Author ()

Tim Plaehn is the lead investment research analyst for income and dividend investing at Investors Alley. He is the editor for The Dividend Hunter, an investment advisory delivering income investments with double digit growth in share price and dividend payments, and 30 Day Dividends, a specialty income service that takes advantage of opportunities for relatively fast, attractive profits around potential dividend payouts.

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