This week’s Stock of the Week has been hurt by lower oil prices but is showing promising growth.

Fluid Business

Holly Frontier Corporation (HFC) is an independent US petroleum refiner with operations throughout the mid-continent, southwestern and Rocky Mountain regions.

As a refiner, it does not have as much risk associated with volatile oil prices as oil producers have—whatever the price of crude is, Holly’s job is to refine it into usable form. Still, when less oil is produced, Holly is given less to refine—which happened when oil prices fell dramatically in 2014 and afterward. Now revenue is again growing. It was $14.3 billion last year and will likely be $14.8 billion this year and about the same next year if oil prices don’t vary too much from recent levels. And earnings, which had been just $0.51/share in 2016, have grown by more than 350% and continue to rise.

Holly also will benefit from the new federal tax law, which will cut its tax rate to a range of 23% to 25% compared with 36% to 38% previously. The recovery of the Canadian oil-sands business—along with improved pipelines giving better access to refineries—will also boost Holly. And the stock dividend of $1.32/share/yr., recently yielding 2.1%, appears secure.

Fiscal year: December. Earnings per share: 2019 est./$4.49…2018 est./$3.88…2017/$2.32.

Brian Peery is portfolio manager of the $1.1 billion Hennessy Cornerstone Mid Cap 30 Fund (HFMDX), Novato, California.