VALERO ENERGY CORP (VLO) Stock Fundamental Analysis
NYSE:VLO - New York Stock Exchange, Inc. - US91913Y1001 - Common Stock - Currency: USD
VLO gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 212 industry peers in the Oil, Gas & Consumable Fuels industry. No worries on liquidiy or solvency for VLO as it has an excellent financial health rating, but there are worries on the profitability. 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.
In the past year VLO had a positive cash flow from operations.
VLO had positive earnings in 4 of the past 5 years.
Each year in the past 5 years VLO had a positive operating cash flow.
1.2 Ratios
With a Return On Assets value of 4.59%, VLO perfoms like the industry average, outperforming 52.83% of the companies in the same industry.
VLO has a Return On Equity (11.27%) which is comparable to the rest of the industry.
Looking at the Return On Invested Capital, with a value of 6.69%, VLO is in line with its industry, outperforming 52.83% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for VLO is significantly below the industry average of 27.42%.
The last Return On Invested Capital (6.69%) for VLO is well below the 3 year average (18.62%), which needs to be investigated, but indicates that VLO had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.59% | ||
| ROE | 11.27% | ||
| ROIC | 6.69% |
ROA(3y)12.46%
ROA(5y)7.25%
ROE(3y)31.15%
ROE(5y)18.17%
ROIC(3y)18.62%
ROIC(5y)N/A
1.3 Margins
VLO has a worse Profit Margin (2.13%) than 63.21% of its industry peers.
VLO's Profit Margin has been stable in the last couple of years.
Looking at the Operating Margin, with a value of 2.89%, VLO is doing worse than 70.75% of the companies in the same industry.
VLO's Operating Margin has declined in the last couple of years.
Looking at the Gross Margin, with a value of 3.70%, VLO is doing worse than 78.77% of the companies in the same industry.
In the last couple of years the Gross Margin of VLO has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 2.89% | ||
| PM (TTM) | 2.13% | ||
| GM | 3.7% |
OM growth 3Y15.66%
OM growth 5Y-3.52%
PM growth 3Y37.91%
PM growth 5Y-0.94%
GM growth 3Y10.46%
GM growth 5Y-3.09%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so VLO is creating value.
Compared to 1 year ago, VLO has less shares outstanding
Compared to 5 years ago, VLO has less shares outstanding
VLO has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 4.21 indicates that VLO is not in any danger for bankruptcy at the moment.
VLO has a Altman-Z score of 4.21. This is amongst the best in the industry. VLO outperforms 89.62% of its industry peers.
VLO has a debt to FCF ratio of 1.81. This is a very positive value and a sign of high solvency as it would only need 1.81 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.81, VLO belongs to the top of the industry, outperforming 84.43% of the companies in the same industry.
VLO has a Debt/Equity ratio of 0.40. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of VLO (0.40) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.4 | ||
| Debt/FCF | 1.81 | ||
| Altman-Z | 4.21 |
ROIC/WACC0.67
WACC9.97%
2.3 Liquidity
VLO has a Current Ratio of 1.53. 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 better Current ratio (1.53) than 67.92% of its industry peers.
A Quick Ratio of 1.03 indicates that VLO should not have too much problems paying its short term obligations.
VLO has a Quick ratio (1.03) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.53 | ||
| Quick Ratio | 1.03 |
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%.
Measured over the past years, VLO shows a quite strong growth in Earnings Per Share. The EPS has been growing by 8.76% on average per year.
Looking at the last year, VLO shows a very negative growth in Revenue. The Revenue has decreased by -10.28% in the last year.
VLO shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 3.70% yearly.
EPS 1Y (TTM)-66.37%
EPS 3Y50.45%
EPS 5Y8.76%
EPS Q2Q%-81.97%
Revenue 1Y (TTM)-10.28%
Revenue growth 3Y4.45%
Revenue growth 5Y3.7%
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 13.77% on average per year.
VLO is expected to show a decrease in Revenue. In the coming years, the Revenue will decrease by -3.58% yearly.
EPS Next Y-16.37%
EPS Next 2Y13.71%
EPS Next 3Y19.53%
EPS Next 5Y13.77%
Revenue Next Year-6.6%
Revenue Next 2Y-1.25%
Revenue Next 3Y-5.24%
Revenue Next 5Y-3.58%
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.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
VLO is valuated correctly with a Price/Earnings ratio of 13.24.
The rest of the industry has a similar Price/Earnings ratio as VLO.
VLO's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 28.29.
A Price/Forward Earnings ratio of 15.84 indicates a correct valuation of VLO.
Compared to the rest of the industry, the Price/Forward Earnings ratio of VLO is on the same level as its industry peers.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.08, VLO is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.24 | ||
| Fwd PE | 15.84 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of VLO indicates a somewhat cheap valuation: VLO is cheaper than 61.79% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, VLO is valued cheaper than 85.38% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 5.99 | ||
| EV/EBITDA | 6.19 |
4.3 Compensation for Growth
VLO's earnings are expected to grow with 19.53% in the coming years. This may justify a more expensive valuation.
PEG (NY)N/A
PEG (5Y)1.51
EPS Next 2Y13.71%
EPS Next 3Y19.53%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 4.11%, VLO is a good candidate for dividend investing.
In the last 3 months the price of VLO has falen by -21.97%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
VLO's Dividend Yield is comparable with the industry average which is at 7.52.
VLO's Dividend Yield is rather good when compared to the S&P500 average which is at 2.52.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.11% |
5.2 History
The dividend of VLO has a limited annual growth rate of 3.43%.
VLO has been paying a dividend for at least 10 years, so it has a reliable track record.
VLO has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)3.43%
Div Incr Years2
Div Non Decr Years14
5.3 Sustainability
VLO pays out 50.11% of its income as dividend. This is a bit on the high side, but may be sustainable.
VLO's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP50.11%
EPS Next 2Y13.71%
EPS Next 3Y19.53%
110.06
+2.93 (+2.73%)
Chartmill FA Rating
GICS SectorEnergy
GICS IndustryGroupEnergy
GICS IndustryOil, Gas & Consumable Fuels
Earnings (Last)
Earnings (Next)
Inst Owners84.32%
Inst Owner Change0.44%
Ins Owners0.34%
Ins Owner Change2.61%
Market Cap34.61B
Analysts79.17
Price Target154.74 (40.6%)
Short Float %3.98%
Short Ratio3.78
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.11% |
Yearly Dividend4.27
Dividend Growth(5Y)3.43%
DP50.11%
Div Incr Years2
Div Non Decr Years14
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)424.62%
Min EPS beat(2)14.9%
Max EPS beat(2)834.33%
EPS beat(4)4
Avg EPS beat(4)217.31%
Min EPS beat(4)3.36%
Max EPS beat(4)834.33%
EPS beat(8)7
Avg EPS beat(8)113.24%
EPS beat(12)11
Avg EPS beat(12)81.53%
EPS beat(16)15
Avg EPS beat(16)80.44%
Revenue beat(2)2
Avg Revenue beat(2)2.7%
Min Revenue beat(2)0.84%
Max Revenue beat(2)4.56%
Revenue beat(4)3
Avg Revenue beat(4)0.46%
Min Revenue beat(4)-4.97%
Max Revenue beat(4)4.56%
Revenue beat(8)4
Avg Revenue beat(8)0.45%
Revenue beat(12)7
Avg Revenue beat(12)3.74%
Revenue beat(16)11
Avg Revenue beat(16)8.37%
PT rev (1m)0.1%
PT rev (3m)0.1%
EPS NQ rev (1m)-58.03%
EPS NQ rev (3m)-73.04%
EPS NY rev (1m)-8.02%
EPS NY rev (3m)-26.41%
Revenue NQ rev (1m)-2.05%
Revenue NQ rev (3m)-5.83%
Revenue NY rev (1m)-0.53%
Revenue NY rev (3m)-2.8%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.24 | ||
| Fwd PE | 15.84 | ||
| P/S | 0.27 | ||
| P/FCF | 5.99 | ||
| P/OCF | 5.18 | ||
| P/B | 1.41 | ||
| P/tB | 1.41 | ||
| EV/EBITDA | 6.19 |
EPS(TTM)8.31
EY7.55%
EPS(NY)6.95
Fwd EY6.31%
FCF(TTM)18.37
FCFY16.69%
OCF(TTM)21.25
OCFY19.31%
SpS413.03
BVpS77.95
TBVpS77.95
PEG (NY)N/A
PEG (5Y)1.51
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.59% | ||
| ROE | 11.27% | ||
| ROCE | 8.41% | ||
| ROIC | 6.69% | ||
| ROICexc | 7.47% | ||
| ROICexgc | 7.47% | ||
| OM | 2.89% | ||
| PM (TTM) | 2.13% | ||
| GM | 3.7% | ||
| FCFM | 4.45% |
ROA(3y)12.46%
ROA(5y)7.25%
ROE(3y)31.15%
ROE(5y)18.17%
ROIC(3y)18.62%
ROIC(5y)N/A
ROICexc(3y)20.98%
ROICexc(5y)N/A
ROICexgc(3y)21.17%
ROICexgc(5y)N/A
ROCE(3y)23.41%
ROCE(5y)N/A
ROICexcg growth 3Y17.52%
ROICexcg growth 5Y-0.99%
ROICexc growth 3Y17.62%
ROICexc growth 5Y-0.91%
OM growth 3Y15.66%
OM growth 5Y-3.52%
PM growth 3Y37.91%
PM growth 5Y-0.94%
GM growth 3Y10.46%
GM growth 5Y-3.09%
F-Score4
Asset Turnover2.16
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.4 | ||
| Debt/FCF | 1.81 | ||
| Debt/EBITDA | 1.49 | ||
| Cap/Depr | 32.7% | ||
| Cap/Sales | 0.7% | ||
| Interest Coverage | 6.75 | ||
| Cash Conversion | 102.36% | ||
| Profit Quality | 209.12% | ||
| Current Ratio | 1.53 | ||
| Quick Ratio | 1.03 | ||
| Altman-Z | 4.21 |
F-Score4
WACC9.97%
ROIC/WACC0.67
Cap/Depr(3y)44.8%
Cap/Depr(5y)55.94%
Cap/Sales(3y)0.76%
Cap/Sales(5y)1.3%
Profit Quality(3y)132.8%
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-16.37%
EPS Next 2Y13.71%
EPS Next 3Y19.53%
EPS Next 5Y13.77%
Revenue 1Y (TTM)-10.28%
Revenue growth 3Y4.45%
Revenue growth 5Y3.7%
Sales Q2Q%-13.15%
Revenue Next Year-6.6%
Revenue Next 2Y-1.25%
Revenue Next 3Y-5.24%
Revenue Next 5Y-3.58%
EBIT growth 1Y-68.33%
EBIT growth 3Y20.8%
EBIT growth 5Y0.04%
EBIT Next Year70.05%
EBIT Next 3Y33.58%
EBIT Next 5Y18.52%
FCF growth 1Y-30.56%
FCF growth 3Y11.26%
FCF growth 5Y10.31%
OCF growth 1Y-27.59%
OCF growth 3Y4.48%
OCF growth 5Y3.86%