Valero Energy Corporation
Valero Energy Corporation Fundamental Analysis
Valero Energy Corporation (VLO) shows weak financial fundamentals with a PE ratio of 25.93, profit margin of 1.89%, and ROE of 9.88%. The company generates $127.2B in annual revenue with weak year-over-year growth of -10.28%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 41.5/100 based on profitability, valuation, growth, and balance sheet metrics. The D grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze VLO's fundamental strength across five key dimensions:
Efficiency Score
WeakVLO struggles to generate sufficient returns from assets.
Valuation Score
ModerateVLO shows balanced valuation metrics.
Growth Score
WeakVLO faces weak or negative growth trends.
Financial Health Score
ExcellentVLO maintains a strong and stable balance sheet.
Profitability Score
WeakVLO struggles to sustain strong margins.
Key Financial Metrics
Is VLO Expensive or Cheap?
P/E Ratio
VLO trades at 25.93 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, VLO's PEG of 0.44 indicates potential undervaluation.
Price to Book
The market values Valero Energy Corporation at 2.57 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 8.59 times EBITDA. This is generally considered low.
How Well Does VLO Make Money?
Net Profit Margin
For every $100 in sales, Valero Energy Corporation keeps $1.89 as profit after all expenses.
Operating Margin
Core operations generate 2.56 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $9.88 in profit for every $100 of shareholder equity.
ROA
Valero Energy Corporation generates $4.94 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Valero Energy Corporation generates limited operating cash flow of $4.96B, signaling weaker underlying cash strength.
Free Cash Flow
Valero Energy Corporation produces free cash flow of $4.47B, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $14.39 in free cash annually.
FCF Yield
VLO converts 6.98% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
25.93
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.44
vs 25 benchmark
P/B Ratio
Price to book value ratio
2.57
vs 25 benchmark
P/S Ratio
Price to sales ratio
0.50
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.45
vs 25 benchmark
Current Ratio
Current assets to current liabilities
3.37
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.10
vs 25 benchmark
ROA
Return on assets percentage
0.05
vs 25 benchmark
ROCE
Return on capital employed
0.10
vs 25 benchmark
How VLO Stacks Against Its Sector Peers
| Metric | VLO Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 25.93 | 20.19 | Worse (Expensive) |
| ROE | 9.88% | 1019.00% | Weak |
| Net Margin | 1.89% | -44017.00% (disorted) | Weak |
| Debt/Equity | 0.45 | -0.65 (disorted) | Distorted |
| Current Ratio | 3.37 | 4.60 | Strong Liquidity |
| ROA | 4.94% | -11655350.00% (disorted) | Weak |
VLO outperforms its industry in 1 out of 6 key metrics, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Valero Energy Corporation's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
53.79%
Industry Style: Cyclical, Value, Commodity
High GrowthEPS CAGR
46.69%
Industry Style: Cyclical, Value, Commodity
High GrowthFCF CAGR
2621.17%
Industry Style: Cyclical, Value, Commodity
High Growth