Is There Any Reason To Invest In HF Sinclair Stock

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HF Sinclair (DINO) stock returned 120.1% in the past year, compared with 11.3% for the S&P 500. It still trades at 5.7 times earnings, well below the 22.6 multiple for the index, so buyers appear to doubt the refiner's profit will last. Buybacks are the main case for owning the shares. HF Sinclair spent 4.1% of its market value on its own shares over the past year, after stock pay. So how far has the buyback actually cut HF Sinclair's share count?

HF Sinclair Has Fewer Shares Than Three Years Ago

In the twelve months to September 2026, HF Sinclair's diluted share count averaged 176 million, down 5.2% from three years earlier. Each remaining share now owns a larger slice of the company's earnings.

The count did not fall every year. It rose to 190 million in the twelve months to September 2024, after HF Sinclair issued shares to buy Holly Energy Partners in December 2023. It eased to 186 million a year later, then fell to 176 million over the latest twelve months.

Over the three years, earnings per share compounded at 19.5% a year, compared with 16.4% for net income. The fall in the share count explains only part of that gap. The path was not smooth. Earnings per share fell 86.0% in the twelve months to September 2024 before recovering.

Refining Cash Pays For HF Sinclair's Buyback

So far, the company has funded the buyback using surplus cash. HF Sinclair produced $3.2 billion of free cash flow over the twelve months to September 2026, against the $1.24 billion it paid out in buybacks and dividends.

Refining fuel generated most of the company's profit in the third quarter. Management put the Refining segment's adjusted EBITDA, a measure of operating profit, at $2.6 billion for the quarter, out of $3 billion for the whole company. Across all operations, the operating margin reached 13.7% over the past twelve months, compared with 2.6% a year earlier.

Can HF Sinclair Keep Buying Back Stock?

Debt is not what would stop the repurchases. HF Sinclair held $3.33 billion of cash and short-term investments at September 30, 2026, slightly more than its $3.25 billion of debt. The company's operating income over the past year covered its interest expense 26.7 times.

The bigger question centers on cash. Free cash flow fell from $2.61 billion in the twelve months to September 2023 to $0.676 billion two years later. Over the same two years, HF Sinclair's buybacks fell from $1.23 billion to $0.22 billion. Both figures recovered in the twelve months to September 2026, with free cash flow rising to $3.2 billion and buybacks reaching $0.872 billion.

The current operating margin stands as the highest for any quarter end in data dating back to late 2016. Management said the third-quarter jump in refining profit came mainly from tight fuel supply, elevated crack spreads between crude and fuel prices, and waivers the EPA granted to small refineries. The company also expects to run less crude in the fourth quarter than in the third, during a planned turnaround at its El Dorado refinery.

Speaking on the October 28 call, management said the company will keep returning cash through buybacks and dividends while targeting a 50% payout ratio. With returns sized to earnings, a smaller profit would likely mean a smaller buyback and a slower fall in the share count. The same day, HF Sinclair named Steve Ledbetter as its next CEO, starting January 1, 2027.

HF Sinclair has fewer shares than it did three years ago, and cash generated over the past year paid for the buyback with room to spare. That cash is less certain to last, coming at a margin far above the company's past. Free cash flow against the cash returned to shareholders is the number to watch in HF Sinclair's fourth-quarter report, expected in February 2027.

How To Act On DINO?

Now you know HF Sinclair better. Our purpose is to inform you so you can decide for yourself, and acting on one stock, in either direction, carries its own risk.

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