VALERO ENERGY CORP (VLO) Stock Fundamental Analysis
NYSE:VLO - New York Stock Exchange, Inc. - US91913Y1001 - Common Stock - Currency: USD
We assign a fundamental rating of 4 out of 10 to VLO. VLO was compared to 213 industry peers in the Oil, Gas & Consumable Fuels industry. VLO has a great financial health rating, but its profitability evaluates not so good. VLO is valued expensive and it does not seem to be growing.
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.
Of the past 5 years VLO 4 years were profitable.
In the past 5 years VLO always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 1.56%, VLO is in line with its industry, outperforming 41.31% of the companies in the same industry.
With a Return On Equity value of 3.93%, VLO perfoms like the industry average, outperforming 43.19% of the companies in the same industry.
The Return On Invested Capital of VLO (4.17%) is worse than 62.44% of its industry peers.
The Average Return On Invested Capital over the past 3 years for VLO is significantly below the industry average of 25.88%.
The last Return On Invested Capital (4.17%) 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 | 1.56% | ||
| ROE | 3.93% | ||
| ROIC | 4.17% |
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
Looking at the Profit Margin, with a value of 0.72%, VLO is doing worse than 66.20% of the companies in the same industry.
VLO's Profit Margin has been stable in the last couple of years.
The Operating Margin of VLO (1.80%) is worse than 72.30% of its industry peers.
In the last couple of years the Operating Margin of VLO has declined.
The Gross Margin of VLO (2.59%) is worse than 77.00% of its industry peers.
In the last couple of years the Gross Margin of VLO has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 1.8% | ||
| PM (TTM) | 0.72% | ||
| GM | 2.59% |
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.
The number of shares outstanding for VLO has been reduced compared to 1 year ago.
The number of shares outstanding for VLO has been reduced compared to 5 years ago.
Compared to 1 year ago, VLO has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 4.27 indicates that VLO is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 4.27, VLO belongs to the best of the industry, outperforming 89.20% of the companies in the same industry.
The Debt to FCF ratio of VLO is 2.25, which is a good value as it means it would take VLO, 2.25 years of fcf income to pay off all of its debts.
VLO's Debt to FCF ratio of 2.25 is amongst the best of the industry. VLO outperforms 82.16% of its industry peers.
VLO has a Debt/Equity ratio of 0.44. This is a healthy value indicating a solid balance between debt and equity.
VLO has a Debt to Equity ratio of 0.44. This is comparable to the rest of the industry: VLO outperforms 51.64% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.44 | ||
| Debt/FCF | 2.25 | ||
| Altman-Z | 4.27 |
ROIC/WACC0.42
WACC10.01%
2.3 Liquidity
VLO has a Current Ratio of 1.56. This is a normal value and indicates that VLO is financially healthy and should not expect problems in meeting its short term obligations.
VLO's Current ratio of 1.56 is fine compared to the rest of the industry. VLO outperforms 67.61% of its industry peers.
A Quick Ratio of 1.09 indicates that VLO should not have too much problems paying its short term obligations.
With a Quick ratio value of 1.09, VLO perfoms like the industry average, outperforming 57.75% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.56 | ||
| Quick Ratio | 1.09 |
3. Growth
3.1 Past
VLO shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -73.45%.
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 decrease in Revenue. The Revenue has decreased by -8.36% in the last year.
Measured over the past years, VLO shows a small growth in Revenue. The Revenue has been growing by 3.70% on average per year.
EPS 1Y (TTM)-73.45%
EPS 3Y50.45%
EPS 5Y8.76%
EPS Q2Q%-76.7%
Revenue 1Y (TTM)-8.36%
Revenue growth 3Y4.45%
Revenue growth 5Y3.7%
Sales Q2Q%-4.73%
3.2 Future
VLO is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 13.77% yearly.
The Revenue is expected to decrease by -3.58% on average over the next years.
EPS Next Y-17.65%
EPS Next 2Y11.19%
EPS Next 3Y17.52%
EPS Next 5Y13.77%
Revenue Next Year-10.29%
Revenue Next 2Y-5.99%
Revenue Next 3Y-1.82%
Revenue Next 5Y-3.58%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
VLO is valuated rather expensively with a Price/Earnings ratio of 24.57.
Based on the Price/Earnings ratio, VLO is valued a bit more expensive than 60.56% of the companies in the same industry.
VLO is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 26.60, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 12.87 indicates a correct valuation of VLO.
The rest of the industry has a similar Price/Forward Earnings ratio as VLO.
When comparing the Price/Forward Earnings ratio of VLO to the average of the S&P500 Index (22.43), we can say VLO is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.57 | ||
| Fwd PE | 12.87 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as VLO.
Based on the Price/Free Cash Flow ratio, VLO is valued a bit cheaper than the industry average as 79.34% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.57 | ||
| EV/EBITDA | 9.51 |
4.3 Compensation for Growth
A more expensive valuation may be justified as VLO's earnings are expected to grow with 17.52% in the coming years.
PEG (NY)N/A
PEG (5Y)2.8
EPS Next 2Y11.19%
EPS Next 3Y17.52%
5. Dividend
5.1 Amount
VLO has a Yearly Dividend Yield of 3.34%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 7.05, 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 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.34% |
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 149.78% of its income as dividend. This is not a sustainable payout ratio.
The dividend of VLO is growing, but earnings are growing more, so the dividend growth is sustainable.
DP149.78%
EPS Next 2Y11.19%
EPS Next 3Y17.52%
132.21
-2.12 (-1.58%)
Chartmill FA Rating
GICS SectorEnergy
GICS IndustryGroupEnergy
GICS IndustryOil, Gas & Consumable Fuels
Earnings (Last)
Earnings (Next)
Inst Owners84.32%
Inst Owner Change4.38%
Ins Owners0.34%
Ins Owner Change3.18%
Market Cap41.41B
Analysts80.83
Price Target144.9 (9.6%)
Short Float %3.94%
Short Ratio3.24
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.34% |
Yearly Dividend4.27
Dividend Growth(5Y)3.43%
DP149.78%
Div Incr Years2
Div Non Decr Years14
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)471.87%
Min EPS beat(2)109.4%
Max EPS beat(2)834.33%
EPS beat(4)4
Avg EPS beat(4)240.5%
Min EPS beat(4)3.36%
Max EPS beat(4)834.33%
EPS beat(8)7
Avg EPS beat(8)125.26%
EPS beat(12)11
Avg EPS beat(12)87.47%
EPS beat(16)15
Avg EPS beat(16)86.68%
Revenue beat(2)2
Avg Revenue beat(2)2.65%
Min Revenue beat(2)0.84%
Max Revenue beat(2)4.47%
Revenue beat(4)4
Avg Revenue beat(4)2.82%
Min Revenue beat(4)0.84%
Max Revenue beat(4)4.56%
Revenue beat(8)4
Avg Revenue beat(8)0.35%
Revenue beat(12)7
Avg Revenue beat(12)0.96%
Revenue beat(16)11
Avg Revenue beat(16)7.99%
PT rev (1m)-6.36%
PT rev (3m)-5.3%
EPS NQ rev (1m)-26.41%
EPS NQ rev (3m)-24.89%
EPS NY rev (1m)-1.54%
EPS NY rev (3m)-9.43%
Revenue NQ rev (1m)-7.36%
Revenue NQ rev (3m)-9.26%
Revenue NY rev (1m)-3.95%
Revenue NY rev (3m)-3.73%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.57 | ||
| Fwd PE | 12.87 | ||
| P/S | 0.32 | ||
| P/FCF | 8.57 | ||
| P/OCF | 7.15 | ||
| P/B | 1.76 | ||
| P/tB | 1.76 | ||
| EV/EBITDA | 9.51 |
EPS(TTM)5.38
EY4.07%
EPS(NY)10.27
Fwd EY7.77%
FCF(TTM)15.43
FCFY11.67%
OCF(TTM)18.48
OCFY13.98%
SpS409.88
BVpS75
TBVpS75
PEG (NY)N/A
PEG (5Y)2.8
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.56% | ||
| ROE | 3.93% | ||
| ROCE | 5.24% | ||
| ROIC | 4.17% | ||
| ROICexc | 4.66% | ||
| ROICexgc | 4.66% | ||
| OM | 1.8% | ||
| PM (TTM) | 0.72% | ||
| GM | 2.59% | ||
| FCFM | 3.76% |
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 Turnover2.17
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.44 | ||
| Debt/FCF | 2.25 | ||
| Debt/EBITDA | 2.03 | ||
| Cap/Depr | 34.51% | ||
| Cap/Sales | 0.74% | ||
| Interest Coverage | 4.27 | ||
| Cash Conversion | 114.02% | ||
| Profit Quality | 523.05% | ||
| Current Ratio | 1.56 | ||
| Quick Ratio | 1.09 | ||
| Altman-Z | 4.27 |
F-Score4
WACC10.01%
ROIC/WACC0.42
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)-73.45%
EPS 3Y50.45%
EPS 5Y8.76%
EPS Q2Q%-76.7%
EPS Next Y-17.65%
EPS Next 2Y11.19%
EPS Next 3Y17.52%
EPS Next 5Y13.77%
Revenue 1Y (TTM)-8.36%
Revenue growth 3Y4.45%
Revenue growth 5Y3.7%
Sales Q2Q%-4.73%
Revenue Next Year-10.29%
Revenue Next 2Y-5.99%
Revenue Next 3Y-1.82%
Revenue Next 5Y-3.58%
EBIT growth 1Y-75.7%
EBIT growth 3Y20.8%
EBIT growth 5Y0.04%
EBIT Next Year70.05%
EBIT Next 3Y33.58%
EBIT Next 5Y18.52%
FCF growth 1Y-64.45%
FCF growth 3Y11.26%
FCF growth 5Y10.31%
OCF growth 1Y-61.8%
OCF growth 3Y4.48%
OCF growth 5Y3.86%