Past performance does not guarantee future results. The data presented is indicative and may not be updated in real-time.
Valero Energy Corporation is a company that makes and sells fuels and other products made from oil. They operate refineries that turn crude oil into gasoline, diesel, and jet fuel, which we use to power cars, trucks, and airplanes. Valero also produces renewable diesel from things like used cooking oils and runs ethanol plants that create a type of fuel from corn. They sell their products through many gas stations and other outlets, helping to keep vehicles running across the United States and beyond.
Streams of revenue
Geographic Distribution
Estimations for reference only
Core Products
Business Type
Business to Business
Competitive Advantages
Key Business Risks
Meeting Expectations
Higher values indicate better execution and credibility
Recent Results
2025-01-30
2024-10-24
2024-07-25
2024-04-25
2024-01-25
2023-10-26
2023-07-27
2023-04-27
2023-01-26
2022-10-25
Takeaways
Valero Energy Corporation demonstrates a robust business model with diversified operations in refining and renewable energy, strong market positioning, and solid financial health. However, it faces significant risks from market volatility and regulatory changes in the energy sector.
Historical data shows an impressive CAGR compared with the USA stock market average, reflecting a strong market position.
10Y annualized return is
positive but below market average
at 6.9% per year
VLO has met or exceeded earnings expectations in
all
recent quarters (10/10)
Latest News
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Attractive Price to Earnings Ratio
Low Price to Sales Ratio
Strong Return on Equity
Healthy Net Profit Margin
Strong Current and Quick Ratios
Low Debt Levels
🏭 Operational Excellence
🔄 Refining Flexibility
💰 Strong Shareholder Returns
🚀 Growth through Innovation
📈 Optimizing Production
🔮 Favorable Market Dynamics
Moderate Price to Cash Flow Ratio
Low Gross Profit Margin
Moderate Interest Coverage
📉 Earnings Decline
⚖️ Margin Pressure
⚠️ Uncertain Market Conditions
🌍 Regulatory Challenges
Overall, Valero demonstrates strong operational quality and a commitment to shareholder returns, but faces challenges from declining earnings and market volatility. Future prospects appear promising with strategic investments and favorable market conditions, although external uncertainties remain a concern.
Analysis Date: January 30, 2025
Last Updated: March 12, 2025
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$331.20
Current Market Price: $102.24
IV/P Ratio: 3.24x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
69.0%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for VLO
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (12.17)
P/B ratio ≤ 1.5 (1.38)
Current ratio ≥ 2.0 (1.53x)
Long-term debt < Net current assets (1.26x)
Margin of safety (69.0%)
VLO does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Return on equity (ROE) at 10.94% indicates efficient use of shareholder equity to generate profits, which is a positive indicator of profitability.
With a net profit margin of 2.13%, VLO demonstrates a reasonable capability to convert revenues into actual profit, which reflects good operational efficiency.
The gross profit margin of 3.55% is quite low, suggesting that there might be challenges in managing production costs relative to sales.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
10.94%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-22)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
3.55%
Higher values indicate better efficiency in production
TTM (as of 2025-04-22)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
2.13%
Higher values indicate better overall profitability
TTM (as of 2025-04-22)
Current ratio at 1.53 and quick ratio at 1.03 indicate VLO has sufficient liquidity to cover short-term obligations, reflecting good financial health.
With a debt-to-equity ratio of 0.47 and debt-to-assets ratio of 0.19, VLO maintains a conservative leverage structure, reducing financial risk.
An interest coverage ratio of 6.53, while adequate, could indicate a need for closer monitoring of earnings relative to interest obligations, especially in a volatile market.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
0.42x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q4 2024
Current Ratio
Current assets divided by current liabilities
1.53x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q4 2024
Valero achieved record personnel and process safety, showcasing its commitment to safety and reliability. This operational excellence supports overall performance and enhances its reputation in the industry.
The ability to process a record volume of heavy sour crude demonstrates Valero's refining flexibility and operational capabilities. This flexibility allows the company to adapt to market conditions and optimize margins effectively.
Valero has maintained a robust payout ratio of 78% for the year, indicating strong financial health and a commitment to returning value to shareholders through dividends and share buybacks.
Net income attributable to Valero stockholders decreased significantly from the previous year, indicating vulnerability to market conditions and lower refining margins.
The refining segment experienced a decline in operating income due to weak margins, which raises concerns about the sustainability of profits in challenging market conditions.
Valero is actively pursuing organic investments, such as the DGD Sustainable Aviation Fuel project, which is fully operational and aims to expand its earnings capacity through innovative products.
The FCC Unit Optimization project at St. Charles is expected to enhance the yield of high-value products, indicating Valero's focus on improving operational efficiency and profitability.
Long-term refining fundamentals are expected to remain strong, supported by low light product inventories and limited capacity additions, which could bolster refining margins.
The company faces potential volatility due to external factors such as tariffs and geopolitical tensions, which could disrupt crude supply and impact margins.
The transition to the 45Z credit system may create short-term economic pressures on renewable diesel production and overall market dynamics, requiring careful navigation.