Dividend: The world’s largest refiner, Valero, delivers a strong dividend

Valero Power (vlo) finds itself on the display screen of IBD’s dividend leaders after posting sturdy earnings outcomes whereas delivering a robust yield.


Valero Power – headquartered in San Antonio, Texas – is the world’s largest oil refining firm. It operates 15 refineries throughout the USA, Canada and the UK.

Rising power demand has seen the corporate’s earnings soar, with earnings per share rising to $29.16 final yr from simply $2.81 in 2021. Up to now in 2023, Valero has continued to report sturdy outcomes.

Earnings for the second quarter have been introduced in July. Valero reported Earnings per share of $5.40 Exceeding analyst estimates of $5.05. Whereas refining revenues have been down considerably from the prior yr, the corporate reported sturdy development in its renewable diesel phase. It noticed $440 million in working revenue in comparison with simply $152 million within the earlier yr.

The second largest producer of renewable diesel

This development has led Valero to grow to be the second largest producer of renewable diesel on the earth.

Valero presents a strong dividend yield of three.2%, greater than double the typical dividend yield of 1.4% for the S&P 500.

whereas the yield remained unchanged over the past three yearsit has proven a pointy enhance over an extended interval: it has risen by 600% over the previous 10 years.

Valero is nicely positioned to proceed to pay a strong yield if power costs stay considerably elevated. The corporate is in a very sturdy place due to the restricted debt it takes on. Complete debt of $9 billion is comparatively small in comparison with the corporate’s market capitalization of $44 billion.

Valero Power inventory is trending increased and is presently again above the 200 day EMA.

The inventory is forming a cup backside with a purchase level at 150.39, per MarketSmith sample recognition. A robust transfer above the resistance round 140 can be bullish.

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