Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-03-26

prices. Considering that other large oil
companies, like the Standards, usually
sell at lower yields and their dividends
are earned by smaller margin. the
Texas stock cannot be said to sell out
of line with its possibilities. Especially
Is this true in view of the aggressive
| expansion program still going forward
and the possibility that rights may be
offered to stockholders IL the expansion
program requires further financing by
the sale of additional stock.
Sinclair Consolidated.
Sinclair Consolidated Oil Corporation
is one of the largest independent oil
teompanies, producing, refining, trans
porting and marketing It's product in 80
States and in many foreign countries.
It owns large amount of oil-producing
land. principally in the mid-continent
fields and In Central America and Mex
leo. The company has been following
a rapid expansion program during the
last few years In an effort to round out
its organization. Last year was really
the first time that the new company has
been operating under conditions which
approached its ideal
During the period of expansion. when
earnings we're fiuctuating widely, COM
|
company had a relatively heavy capital
set up for an oil company to begin with,
carrying an issue Of bonds and preferred
ahead of the common. In spite of this,
however. it has made real progress and
just recently improved its financial posi-
ton tremendously by the sale Of 100000
shares of common stock to Arthur w.
Cutten and associates. As a result, the
company has between 40 and so million
dollars cash and is In good financial
condition,
Sinclair's earnings have fiuctuated
widely during the past seven years and
the stock has moved over wide range.
In two Of the seven years the company
showed loss, but after averaging $l67
a share for the full seven years, earn
ings reached SO last year. The directors
recently resumed regular dividends on
the Common stock at 50 q share, with
an extra, which amounted to IS cents,
II this rate of So a year Is maintained,
1t will yield over per cent on the cur
rent selling price of the stock. The
company will then be paying out more
than earnings statements of recent
years would seem to warrant. Perhaps
the directors are confident that the
newly expanded company can maintain
earnings sufficient to warrant the div
idend, but the investor who must rely
upon past record has no definite proof
Of this.
Atlantic Refining.
Atlantic Refining, one of the oldest
and largest manufacturers of lubricat-
ing oils in the world, was controlled by
, the Standard Oil Co. until the dissolu-
ton In 1911. 1t formerly obtained most
of its crude oil from Pennsylvania fields.
The year 1928 was Atlantic's first as
large producer, for at that time 1t began
to pump It's crude oil through its own
pipe line to the Gulf, carry the oil by
its own steamers to its Philadelphia re-
finery and even pump some OF the crude
inland to one of the companyS re-
flneries at Franklin. Pa.
The company markets Its products
through about 800 service stations winch
1t owns and II 600 dealer-owned pumps
located on the East Coast from Massa-
chusetts to Florida. This region con-
sumes 81 per cent Of all petroleum prod
ucts used in this country. In Pennsyl-
vania, Atlantic Refining sells IS out OF
every 100 gallons OF gasoline, whereas In
other States where its business Is NOT
so well established il sells only gal
Ions out of every 100. With the Penn
sylvania proportion as an incentive, the
company Is expanding In the Eastern
field. as well as doing large export
business.
The company's accounting methods
have always been so very conservative
that 1t is somewhat difficult TO estl-
mate the actual earnings. 1t was Q
distinct surprise however. when last
years earnings touched $7.72 snare,
after allowing for preferred DIVIDENDS.
Reported earnings for the previous
years had only averaged SLIT share.
The large increase last year was ac-
counted for by reduction In operating
expenses, better prices for products.
more efficient refining methods and
larger profits from crude oil production.
The chart shows that the stock adj
vanced more rapidly last year than most
oil stocks, rejecting these larger earn. |
ings. Even at present prices, however,
the stock Is only selling at a little |
over eight times last years earnings |
although the yield is only is per cent |
on the conservative 81 dividend.