For the past few decades, oil refining has been a lousy business. An arcane set of regulations and fierce competition from abroad created lots of headaches with only small returns.#-ad_banner-#​

The U.S. shale boom changes all that.

Our newfound abundance of oil and gas means U.S. refiners can produce gasoline, diesel and other distillates at cheaper prices than their foreign rivals. The U.S. has even begun to become a major exporter of these refined products. 

The change in fortune has caught the industry off guard. Suddenly, leading firms are producing massive amounts of cash flow, and they are scrambling for ways to reward investors. Many of the refiners I profiled back in August are now in the midst of massive share buyback programs, dividend boosts and debt reduction — the three components that make up impressive Total Yields.

Simply put, “Total Yield” stocks are companies that use the cash they generate to 1) pay steady dividends, 2) buy back large amounts of their own stock, and 3) pay down debt.

Why should investors care about these three strategies? When companies execute on all three fronts, it beats the S&P 500 — as well as regular dividend investing — hands down. (To learn more about this strategy, read our step-by-step guide here.)

HollyFrontier (NYSE: HFC) is a textbook example of the wealth now flooding refiners’ coffers. Before 2011, this company had only generated more than $150 million in annual free cash flow once in its history, with $238 million in 2007. Yet in 2011 and 2012, that figure soared to around $700 million — in each year!

Free cash flow in 2013 was likely only half as good, as refining margins slumped, but is expected to rebound to those 2011 and 2012 peaks this year again. Analysts at Merrill Lynch project that the refiner will generate $4.5 billion in free cash flow over the next five years — an average of $900 million a year.

What’s the company doing with all that free cash flow? HollyFrontier paid four special dividends totaling $2 per share in 2012, along with its regular quarterly dividend. The firm declared another special dividend last May of $0.50 a share. Even beyond those special one-off dividends, the company still offers a regular quarterly dividend of $0.30 a share, and the annual yield stands at 2.5%. 

The balance sheet is also getting attention. Since the end of 2012, long-term debt has been reduced by more than $300 million to a recent $1 billion. (Look for updated figures when fourth-quarter results are released in February.)

Meanwhile, an ongoing stock buyback has begun to make a meaningful dent in the share count: Shares outstanding, which stood at 209 million at the end of 2011, have recently fallen below 200 million. To be sure, there are other companies that are buying back stock at a faster rate, but few of them are also doling out special dividends (on top of regular dividends) and paying down debt.

Here’s one thing that’s almost certain: When fourth-quarter results are released, HFC may announce a fresh share buyback program, another special dividend, a hike to its regular dividend — or all three.

If this stock’s 2.5% fixed dividend yield isn’t enough for you, then check out Holly Energy Partners (NYSE: HEP), the refiner’s MLP subsidiary, which currently yields 6.1%. That MLP has hiked its dividend every year for a decade, and in light of the parent company’s surging cash flow, further dividend boosts in 2014 are virtually assured.

And while talking about refining MLPs, I still think CVR Refining (NYSE: CVRR) may end up sporting the highest yields in the sector in 2014.

Risks to Consider: Demand for gasoline may have peaked as U.S. cars become more efficient, so these refiners are counting on a continued growth in exports to help boost volumes.

Action to Take –> Nobody scoffs at energy refining anymore. A once troubled industry now looks much healthier. And HollyFrontier, which has a proven track record of delivering Total Yield, looks set to lead the pack in the years ahead, thanks to solid free cash flow forecasts.

P.S. My colleague Nathan Slaughter likes companies like HollyFrontier that pay rising dividends, slash debt and buy back shares. In fact, Nathan is putting the finishing touches on a special report about stocks like these — which are often the absolute best performing stocks over the long-term. To reserve your free copy of this step-by-step guide, click here.