VALERO ENERGY CORP (VLO) Stock Fundamental Analysis
NYSE:VLO - New York Stock Exchange, Inc. - US91913Y1001 - Common Stock - Currency: USD
Taking everything into account, VLO scores 4 out of 10 in our fundamental rating. VLO was compared to 211 industry peers in the Oil, Gas & Consumable Fuels industry. Both the profitability and the financial health of VLO get a neutral evaluation. Nothing too spectacular is happening here. VLO is valued correctly, but it does not seem to be growing. Finally VLO also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
VLO had positive earnings in the past year.
VLO had a positive operating cash flow in the past year.
In multiple years VLO reported negative net income over the last 5 years.
VLO had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 6.10%, VLO is in line with its industry, outperforming 55.88% of the companies in the same industry.
With a decent Return On Equity value of 14.58%, VLO is doing good in the industry, outperforming 60.29% of the companies in the same industry.
VLO has a Return On Invested Capital (8.55%) which is in line with its industry peers.
VLO had an Average Return On Invested Capital over the past 3 years of 17.35%. This is significantly below the industry average of 28.75%.
The last Return On Invested Capital (8.55%) for VLO is well below the 3 year average (17.35%), which needs to be investigated, but indicates that VLO had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.1% | ||
| ROE | 14.58% | ||
| ROIC | 8.55% |
ROA(3y)11.47%
ROA(5y)7.23%
ROE(3y)29.06%
ROE(5y)18.14%
ROIC(3y)17.35%
ROIC(5y)N/A
1.3 Margins
VLO's Profit Margin of 2.74% is on the low side compared to the rest of the industry. VLO is outperformed by 67.65% of its industry peers.
VLO's Profit Margin has improved in the last couple of years.
With a Operating Margin value of 3.69%, VLO is not doing good in the industry: 74.02% of the companies in the same industry are doing better.
In the last couple of years the Operating Margin of VLO has grown nicely.
Looking at the Gross Margin, with a value of 4.50%, VLO is doing worse than 79.90% of the companies in the same industry.
In the last couple of years the Gross Margin of VLO has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 3.69% | ||
| PM (TTM) | 2.74% | ||
| GM | 4.5% |
OM growth 3YN/A
OM growth 5Y15.14%
PM growth 3YN/A
PM growth 5Y18%
GM growth 3YN/A
GM growth 5Y12.67%
2. Health
2.1 Basic Checks
VLO has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
VLO has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
2.2 Solvency
VLO has an Altman-Z score of 4.52. This indicates that VLO is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 4.52, VLO belongs to the best of the industry, outperforming 87.75% of the companies in the same industry.
The Debt to FCF ratio of VLO is 1.80, which is an excellent value as it means it would take VLO, only 1.80 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 1.80, VLO is doing good in the industry, outperforming 78.92% of the companies in the same industry.
VLO has a Debt/Equity ratio of 0.39. This is a healthy value indicating a solid balance between debt and equity.
Looking at the Debt to Equity ratio, with a value of 0.39, VLO is in line with its industry, outperforming 50.49% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.39 | ||
| Debt/FCF | 1.8 | ||
| Altman-Z | 4.52 |
ROIC/WACC1.04
WACC8.25%
2.3 Liquidity
VLO has a Current Ratio of 1.57. This is a normal value and indicates that VLO is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.57, VLO is in the better half of the industry, outperforming 62.75% of the companies in the same industry.
VLO has a Quick Ratio of 1.11. This is a normal value and indicates that VLO is financially healthy and should not expect problems in meeting its short term obligations.
VLO has a Quick ratio (1.11) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.57 | ||
| Quick Ratio | 1.11 |
3. Growth
3.1 Past
VLO shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -66.37%.
VLO shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 8.76% yearly.
EPS 1Y (TTM)-66.37%
EPS 3Y50.45%
EPS 5Y8.76%
EPS Q2Q%-81.97%
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%-13.15%
3.2 Future
Based on estimates for the next years, VLO will show a quite strong growth in Earnings Per Share. The EPS will grow by 18.35% on average per year.
Based on estimates for the next years, VLO will show a decrease in Revenue. The Revenue will decrease by -4.32% on average per year.
EPS Next Y-9.08%
EPS Next 2Y16.22%
EPS Next 3Y25.63%
EPS Next 5Y18.35%
Revenue Next Year-6.81%
Revenue Next 2Y-2%
Revenue Next 3Y-5.76%
Revenue Next 5Y-4.32%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 16.21, VLO is valued correctly.
The rest of the industry has a similar Price/Earnings ratio as VLO.
VLO's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 29.63.
Based on the Price/Forward Earnings ratio of 17.83, the valuation of VLO can be described as rather expensive.
VLO's Price/Forward Earnings ratio is in line with the industry average.
The average S&P500 Price/Forward Earnings ratio is at 22.68. VLO is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.21 | ||
| Fwd PE | 17.83 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as VLO.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of VLO indicates a somewhat cheap valuation: VLO is cheaper than 77.45% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 7.12 | ||
| EV/EBITDA | 6.43 |
4.3 Compensation for Growth
A more expensive valuation may be justified as VLO's earnings are expected to grow with 25.63% in the coming years.
PEG (NY)N/A
PEG (5Y)1.85
EPS Next 2Y16.22%
EPS Next 3Y25.63%
5. Dividend
5.1 Amount
VLO has a Yearly Dividend Yield of 3.25%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 6.75, VLO has a dividend in line with its industry peers.
VLO's Dividend Yield is a higher than the S&P500 average which is at 2.29.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.25% |
5.2 History
The dividend of VLO has a limited annual growth rate of 5.08%.
VLO has paid a dividend for at least 10 years, which is a reliable track record.
VLO has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)5.08%
Div Incr Years2
Div Non Decr Years14
5.3 Sustainability
VLO pays out 37.79% of its income as dividend. This is a sustainable payout ratio.
The dividend of VLO is growing, but earnings are growing more, so the dividend growth is sustainable.
DP37.79%
EPS Next 2Y16.22%
EPS Next 3Y25.63%
134.74
-4.4 (-3.16%)
Chartmill FA Rating
GICS SectorEnergy
GICS IndustryGroupEnergy
GICS IndustryOil, Gas & Consumable Fuels
Earnings (Last)
Earnings (Next)
Inst Owners84.32%
Inst Owner Change-0.05%
Ins Owners0.34%
Ins Owner Change0.95%
Market Cap42.66B
Analysts77.5
Price Target154.58 (14.72%)
Short Float %3.94%
Short Ratio4.03
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.25% |
Yearly Dividend4.12
Dividend Growth(5Y)5.08%
DP37.79%
Div Incr Years2
Div Non Decr Years14
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)9.13%
Min EPS beat(2)3.36%
Max EPS beat(2)14.9%
EPS beat(4)4
Avg EPS beat(4)13.45%
Min EPS beat(4)3.36%
Max EPS beat(4)18.91%
EPS beat(8)7
Avg EPS beat(8)10.64%
EPS beat(12)11
Avg EPS beat(12)14.75%
EPS beat(16)15
Avg EPS beat(16)29.92%
Revenue beat(2)2
Avg Revenue beat(2)2.99%
Min Revenue beat(2)1.41%
Max Revenue beat(2)4.56%
Revenue beat(4)2
Avg Revenue beat(4)-0.19%
Min Revenue beat(4)-4.97%
Max Revenue beat(4)4.56%
Revenue beat(8)3
Avg Revenue beat(8)-0.27%
Revenue beat(12)7
Avg Revenue beat(12)6.19%
Revenue beat(16)11
Avg Revenue beat(16)8.4%
PT rev (1m)-1.01%
PT rev (3m)-3.22%
EPS NQ rev (1m)-90.63%
EPS NQ rev (3m)-91.03%
EPS NY rev (1m)-4.88%
EPS NY rev (3m)-7.34%
Revenue NQ rev (1m)-2.42%
Revenue NQ rev (3m)-5.7%
Revenue NY rev (1m)-0.23%
Revenue NY rev (3m)-0.85%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.21 | ||
| Fwd PE | 17.83 | ||
| P/S | 0.32 | ||
| P/FCF | 7.12 | ||
| P/OCF | 6.23 | ||
| P/B | 1.69 | ||
| P/tB | 1.69 | ||
| EV/EBITDA | 6.43 |
EPS(TTM)8.31
EY6.17%
EPS(NY)7.56
Fwd EY5.61%
FCF(TTM)18.93
FCFY14.05%
OCF(TTM)21.64
OCFY16.06%
SpS424.96
BVpS79.77
TBVpS79.77
PEG (NY)N/A
PEG (5Y)1.85
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.1% | ||
| ROE | 14.58% | ||
| ROCE | 11% | ||
| ROIC | 8.55% | ||
| ROICexc | 9.66% | ||
| ROICexgc | 9.66% | ||
| OM | 3.69% | ||
| PM (TTM) | 2.74% | ||
| GM | 4.5% | ||
| FCFM | 4.45% |
ROA(3y)11.47%
ROA(5y)7.23%
ROE(3y)29.06%
ROE(5y)18.14%
ROIC(3y)17.35%
ROIC(5y)N/A
ROICexc(3y)19.56%
ROICexc(5y)N/A
ROICexgc(3y)19.73%
ROICexgc(5y)N/A
ROCE(3y)22.34%
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5Y17.7%
ROICexc growth 3YN/A
ROICexc growth 5Y17.45%
OM growth 3YN/A
OM growth 5Y15.14%
PM growth 3YN/A
PM growth 5Y18%
GM growth 3YN/A
GM growth 5Y12.67%
F-Score5
Asset Turnover2.23
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.39 | ||
| Debt/FCF | 1.8 | ||
| Debt/EBITDA | 1.27 | ||
| Cap/Depr | 31.09% | ||
| Cap/Sales | 0.64% | ||
| Interest Coverage | 8.79 | ||
| Cash Conversion | 88.69% | ||
| Profit Quality | 162.78% | ||
| Current Ratio | 1.57 | ||
| Quick Ratio | 1.11 | ||
| Altman-Z | 4.52 |
F-Score5
WACC8.25%
ROIC/WACC1.04
Cap/Depr(3y)56.98%
Cap/Depr(5y)67.08%
Cap/Sales(3y)1.01%
Cap/Sales(5y)1.53%
Profit Quality(3y)214.39%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-66.37%
EPS 3Y50.45%
EPS 5Y8.76%
EPS Q2Q%-81.97%
EPS Next Y-9.08%
EPS Next 2Y16.22%
EPS Next 3Y25.63%
EPS Next 5Y18.35%
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%-13.15%
Revenue Next Year-6.81%
Revenue Next 2Y-2%
Revenue Next 3Y-5.76%
Revenue Next 5Y-4.32%
EBIT growth 1Y-66.17%
EBIT growth 3YN/A
EBIT growth 5Y20.14%
EBIT Next Year-45.55%
EBIT Next 3Y-12.8%
EBIT Next 5Y-5.4%
FCF growth 1Y-34.59%
FCF growth 3YN/A
FCF growth 5Y26%
OCF growth 1Y-37.32%
OCF growth 3Y113.53%
OCF growth 5Y16.12%