NYSE:VLO is probably undervalued for the fundamentals it is displaying.

Last update: Feb 21, 2024

VALERO ENERGY CORP (NYSE:VLO) has caught the attention of our stock screener as a great value stock. NYSE:VLO excels in profitability, solvency, and liquidity, all while being very reasonably priced. Let's delve into the details.

Exploring NYSE:VLO's Valuation

ChartMill employs its own Valuation Rating system for all stocks. This score, ranging from 0 to 10, is determined by evaluating different valuation factors, including price to earnings and free cash flow, both in absolute terms and relative to the market and industry. NYSE:VLO has earned a 7 for valuation:

With a Price/Earnings ratio of 4.56, the valuation of VLO can be described as very cheap.
Based on the Price/Earnings ratio, VLO is valued cheaply inside the industry as 82.33% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 26.00, VLO is valued rather cheaply.
A Price/Forward Earnings ratio of 9.36 indicates a reasonable valuation of VLO.
VLO's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. VLO is cheaper than 62.79% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.37. VLO is valued rather cheaply when compared to this.
Based on the Enterprise Value to EBITDA ratio, VLO is valued cheaper than 82.33% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, VLO is valued cheaper than 84.65% of the companies in the same industry.

Profitability Examination for NYSE:VLO

ChartMill assigns a Profitability Rating to every stock. This score ranges from 0 to 10 and evaluates the different profitability ratios and margins, both absolutely, but also relative to the industry peers. NYSE:VLO scores a 5 out of 10:

VLO has a Return On Assets of 16.95%. This is in the better half of the industry: VLO outperforms 79.07% of its industry peers.
Looking at the Return On Equity, with a value of 41.23%, VLO belongs to the top of the industry, outperforming 82.79% of the companies in the same industry.
VLO has a Return On Invested Capital of 25.90%. This is amongst the best in the industry. VLO outperforms 87.91% of its industry peers.
VLO's Profit Margin has improved in the last couple of years.
In the last couple of years the Operating Margin of VLO has grown nicely.
In the last couple of years the Gross Margin of VLO has grown nicely.

Health Assessment of NYSE:VLO

To gauge a stock's financial health, ChartMill utilizes a Health Rating on a scale of 0 to 10. This comprehensive evaluation encompasses liquidity and solvency, both in absolute terms and in comparison to industry peers. NYSE:VLO has earned a 7 out of 10:

An Altman-Z score of 5.06 indicates that VLO is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 5.06, VLO belongs to the best of the industry, outperforming 89.30% of the companies in the same industry.
VLO has a debt to FCF ratio of 1.04. This is a very positive value and a sign of high solvency as it would only need 1.04 years to pay back of all of its debts.
With an excellent Debt to FCF ratio value of 1.04, VLO belongs to the best of the industry, outperforming 81.40% 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.
VLO's Current ratio of 1.51 is fine compared to the rest of the industry. VLO outperforms 63.72% of its industry peers.

Growth Assessment of NYSE:VLO

Every stock receives a Growth Rating from ChartMill, ranging from 0 to 10. This rating assesses various growth aspects, including historical and projected EPS and revenue growth. NYSE:VLO boasts a 4 out of 10:

The Earnings Per Share has grown by an impressive 27.14% over the past year.
Measured over the past years, VLO shows a very strong growth in Earnings Per Share. The EPS has been growing by 42.51% on average per year.
Measured over the past years, VLO shows a quite strong growth in Revenue. The Revenue has been growing by 13.42% on average per year.

Our Decent Value screener lists more Decent Value stocks and is updated daily.

Our latest full fundamental report of VLO contains the most current fundamental analsysis.

Disclaimer

This article should in no way be interpreted as advice in any way. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.