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 robust earnings outcomes whereas delivering a powerful 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 12 months from simply $2.81 in 2021. To this point in 2023, Valero has continued to report robust 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 12 months, the corporate reported robust progress in its renewable diesel section. It noticed $440 million in working revenue in comparison with simply $152 million within the earlier 12 months.

The second largest producer of renewable diesel

This progress has led Valero to turn into the second largest producer of renewable diesel on this planet.

Valero provides a strong dividend yield of three.2%, greater than double the common 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 properly positioned to proceed to pay a strong yield if power costs stay considerably elevated. The corporate is in a very robust place due to the restricted debt it takes on. Whole 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 at the moment 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 will likely be bullish.

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