As an oil refiner, PBF Energy (PBF) experienced a much milder impact from falling oil prices, than most other stocks within the energy sector.

This allowed the company to maintain its hefty 5.5% dividend yield during the oil crash of 2014-2016, when so many other energy stocks cut or eliminated their dividends.

PBF’s relative strength has attracted a high-profile investor to the stock: Seth Klarman, Chief Executive Officer and Portfolio Manager of Baupost Group.

Seth Klarman is a noted value investor, and manages a stock portfolio that is filled with cheap, high-yield dividend stocks.

As of December 31, 2016, Baupost held a 16% stake in the company, worth $438 million.

PBF was formed in 2008 and began paying dividends in 2013. As a result, it is not a Dividend Achiever, a group of 271 stocks with 10+ years of consecutive dividend increases.

This article will discuss why PBF could be a hidden gem for growth and dividends in 2017.

Business Overview

PBF has a diverse asset base, with operations in several major U.S. regions.

The company has total refining capacity of 884,00 barrels per day, good for the fourth-most among U.S. independent refiners.

Source: January 2017 Investor Presentation, page 4

Its operations are focused on the following regions:

The crash in oil and gas prices from 2014-2016 wreaked havoc across the entire energy sector.

Fortunately, there were a select few industries within the energy sector, that were spared from the worst of the crisis.

One of them was the refining industry.

Refiners were not hit nearly as hard as oil and gas producers, because refiners tend to benefit from volatility.

When oil prices sank, it actually widened refining spreads, and increased profit margins.

This benefited PBF—in 2016, revenue and earnings-per-share increased 21% and 5.4%, respectively.