NYSE:VLO

Stock Analysis Report

Executive Summary

Valero Energy Corporation operates as an independent petroleum refining and ethanol producing company in the United States, Canada, the United Kingdom, Ireland, and internationally.


Snowflake Analysis

Established dividend payer with mediocre balance sheet.


Similar Companies

Share Price & News

How has Valero Energy's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: VLO has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0.3%

VLO

-0.7%

US Oil and Gas

-1.1%

US Market


1 Year Return

-2.8%

VLO

-18.9%

US Oil and Gas

17.9%

US Market

Return vs Industry: VLO exceeded the US Oil and Gas industry which returned -18.9% over the past year.

Return vs Market: VLO underperformed the US Market which returned 18% over the past year.


Shareholder returns

VLOIndustryMarket
7 Day0.3%-0.7%-1.1%
30 Day-7.1%-5.8%1.4%
90 Day-14.8%-7.6%6.9%
1 Year1.4%-2.8%-15.7%-18.9%20.3%17.9%
3 Year39.5%24.3%-12.1%-20.4%47.8%38.3%
5 Year62.0%34.4%-21.3%-32.9%71.9%53.0%

Price Volatility Vs. Market

How volatile is Valero Energy's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Valero Energy undervalued compared to its fair value and its price relative to the market?

15.3%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: VLO ($82.9) is trading below our estimate of fair value ($97.99)

Significantly Below Fair Value: VLO is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: VLO is poor value based on its PE Ratio (14.1x) compared to the Oil and Gas industry average (10x).

PE vs Market: VLO is good value based on its PE Ratio (14.1x) compared to the US market (18.2x).


Price to Earnings Growth Ratio

PEG Ratio: VLO's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: VLO is overvalued based on its PB Ratio (1.6x) compared to the US Oil and Gas industry average (0.8x).


Next Steps

Future Growth

How is Valero Energy forecast to perform in the next 1 to 3 years based on estimates from 14 analysts?

-2.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: VLO's earnings are forecast to decline over the next 3 years (-2.9% per year).

Earnings vs Market: VLO's earnings are forecast to decline over the next 3 years (-2.9% per year).

High Growth Earnings: VLO's earnings are forecast to decline over the next 3 years.

Revenue vs Market: VLO's revenue (0.06% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: VLO's revenue (0.06% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: VLO's Return on Equity is forecast to be low in 3 years time (13.6%).


Next Steps

Past Performance

How has Valero Energy performed over the past 5 years?

-6.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: VLO has high quality earnings.

Growing Profit Margin: VLO's current net profit margins (2.2%) are lower than last year (2.8%).


Past Earnings Growth Analysis

Earnings Trend: VLO's earnings have declined by -6.6% per year over the past 5 years.

Accelerating Growth: VLO's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: VLO had negative earnings growth (-22.2%) over the past year, making it difficult to compare to the Oil and Gas industry average (-13.3%).


Return on Equity

High ROE: VLO's Return on Equity (12.9%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Valero Energy's financial position?


Financial Position Analysis

Short Term Liabilities: VLO's short term assets ($17.0B) exceed its short term liabilities ($12.1B).

Long Term Liabilities: VLO's short term assets ($17.0B) do not cover its long term liabilities ($17.5B).


Debt to Equity History and Analysis

Debt Level: VLO's debt to equity ratio (40.7%) is considered high.

Reducing Debt: VLO's debt to equity ratio has increased from 30.1% to 40.7% over the past 5 years.

Debt Coverage: VLO's debt is well covered by operating cash flow (62.6%).

Interest Coverage: VLO's interest payments on its debt are well covered by EBIT (8.4x coverage).


Balance Sheet

Inventory Level: VLO has a high level of physical assets or inventory.

Debt Coverage by Assets: VLO's debt is covered by short term assets (assets are 1.9x debt).


Next Steps

Dividend

What is Valero Energy's current dividend yield, its reliability and sustainability?

4.73%

Current Dividend Yield


Dividend Yield vs Market

company4.7%marketbottom25%1.4%markettop25%3.7%industryaverage4.6%forecastin3Years5.1%

Current dividend yield vs market & industry

Notable Dividend: VLO's dividend (4.73%) is higher than the bottom 25% of dividend payers in the US market (1.45%).

High Dividend: VLO's dividend (4.73%) is in the top 25% of dividend payers in the US market (3.73%)


Stability and Growth of Payments

Stable Dividend: VLO's dividend payments have been volatile in the past 10 years.

Growing Dividend: VLO's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (61.4%), VLO's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: VLO's dividends in 3 years are forecast to be covered by earnings (52.2% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.1yrs

Average management tenure


CEO

Joe Gorder (62yo)

5.8yrs

Tenure

US$18,759,156

Compensation

Mr. Joseph W. Gorder, also known as Joe, has been the Chief Executive Officer of Valero Energy Corporation since May 01, 2014 and served as its President from November 2012 to January 23, 2020. Mr. Gorder  ...


CEO Compensation Analysis

Compensation vs Market: Joe's total compensation ($USD18.76M) is above average for companies of similar size in the US market ($USD10.79M).

Compensation vs Earnings: Joe's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Joseph Gorder
Chairman & CEO5.8yrsUS$18.76m0.11% $37.3m
Donna Titzman
Executive VP & CFO1.8yrsUS$3.44m0.050% $16.9m
R. Riggs
President & COO2.1yrsUS$4.21m0.044% $15.1m
Gary Simmons
Executive VP & Chief Commercial Officer5.8yrsUS$2.59m0.031% $10.7m
Lawrence Schmeltekopf
Chief Accounting Officer & Senior VP0yrsno datano data
Cheryl Thomas
Chief Information Officer & Senior VP of Information Services0yrsno datano data
Julia Reinhart
Senior Vice President of Human Resources & Administration0yrsno datano data
J. Gilbert
Disclosure & Compliance Officer and Secretary0yrsno datano data
Jason Fraser
Executive VP & General Counsel1.1yrsno data0.012% $4.0m
John Locke
Vice President of Investor Relations0yrsno datano data

2.1yrs

Average Tenure

54.5yo

Average Age

Experienced Management: VLO's management team is considered experienced (2.1 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Joseph Gorder
Chairman & CEO5.8yrsUS$18.76m0.11% $37.3m
Stephen Waters
Independent Director11.4yrsUS$305.05k0.0030% $1.0m
Robert Profusek
Lead Director10.1yrsUS$335.05k0.0092% $3.1m
Randall Weisenburger
Independent Director9.1yrsUS$325.05k0.013% $4.6m
Rayford Wilkins
Independent Director9.1yrsUS$325.05k0.0078% $2.7m
Kimberly Greene
Independent Director3.6yrsUS$305.05k0.0014% $473.2k
H. Eberhart
Independent Director3.6yrsUS$305.05k0.0011% $377.9k
Philip Pfeiffer
Independent Director8yrsUS$305.05k0.0051% $1.7m
Donald Nickles
Independent Director15.1yrsUS$305.05k0.0063% $2.2m
Deborah Majoras
Independent Director7.6yrsUS$325.05k0.0048% $1.6m

8.5yrs

Average Tenure

66.5yo

Average Age

Experienced Board: VLO's board of directors are considered experienced (8.5 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Valero Energy Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Valero Energy Corporation
  • Ticker: VLO
  • Exchange: NYSE
  • Founded: 1980
  • Industry: Oil and Gas Refining and Marketing
  • Sector: Energy
  • Market Cap: US$34.043b
  • Shares outstanding: 410.65m
  • Website: https://www.valero.com

Number of Employees


Location

  • Valero Energy Corporation
  • One Valero Way
  • San Antonio
  • Texas
  • 78249
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
VLONYSE (New York Stock Exchange)YesCommon StockUSUSDJan 1980
V1LDB (Deutsche Boerse AG)YesCommon StockDEEURJan 1980
VLO *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNJan 1980
0LK6LSE (London Stock Exchange)YesCommon StockGBUSDJan 1980
V1LBRSE (Berne Stock Exchange)YesCommon StockCHCHFJan 1980
V1LETLX (Eurotlx)YesCommon StockITEURJan 1980
VLOE34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EA REPR 1/2 COM SHS USD0.01BRBRLAug 2016

Biography

Valero Energy Corporation operates as an independent petroleum refining and ethanol producing company in the United States, Canada, the United Kingdom, Ireland, and internationally. It operates through three segments: Refining, Ethanol, and VLP (Valero Energy Partners LP). The company is involved in oil and gas refining, marketing, and bulk selling activities. It produces conventional and premium gasolines, gasoline meeting the specifications of the California Air Resources Board (CARB), diesel fuels, low-sulfur and ultra-low-sulfur diesel fuels, CARB diesel, other distillates, jet fuels, asphalts, petrochemicals, lubricants, and other refined petroleum products. As of December 31, 2018, the company owned 15 petroleum refineries with a combined throughput capacity of approximately 3.1 million barrels per day. It markets its refined products through wholesale rack and bulk markets; and through approximately 7,000 outlets under the Valero, Beacon, Diamond Shamrock, Shamrock, Ultramar, and Texaco brand names. The company also produces and sells ethanol, distiller grains, and corn oil primarily to refiners and gasoline blenders, as well as to animal feed customers. It owns and operates 14 ethanol plants with a combined ethanol production capacity of approximately 1.73 billion gallons per year. In addition, the company owns, operates, develops, and acquires crude oil and refined petroleum products pipelines, terminals, and other transportation and logistics assets that provides transportation and terminaling services. The company was formerly known as Valero Refining and Marketing Company and changed its name to Valero Energy Corporation in August 1997. Valero Energy Corporation was founded in 1980 and is headquartered in San Antonio, Texas. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/23 01:06
End of Day Share Price2020/02/21 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.