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Could Valero Energy’s Dividend Payment Rise in Q4 2018?

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Oct. 9 2018, Updated 7:31 a.m. ET

Valero’s dividend payment

Valero Energy’s (VLO) dividend payments have been increasing steadily over the past few years. In the third quarter of 2018, it paid a dividend of $0.80 per share, which represents a 33% growth from Q3 2016. The dividend was announced on July 20 and paid on September 5.

Wall Street analysts anticipate Valero’s dividend payment to stay stable at $0.80 per share in the fourth quarter of 2018. That could be because it already raised its dividend in the first quarter. It also raised its dividend in the first quarter of 2017, so analysts could be assuming it will follow the trend and not raise its dividend in the fourth quarter.

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Valero’s dividend yield

Valero’s current dividend yield is 2.7%. In Q3 2016, it was 4.6%. The fall is due to a rise in VLO stock in that period. Valero has consistently returned wealth to shareholders in the form of dividends and share buybacks. In the second quarter of 2018, it returned $672 million, and $345 million of that was dividends.

Peer dividend yields

Marathon Petroleum’s (MPC) dividend yield has narrowed from 3.7% in Q3 2016 to 2.1% currently. Phillips 66’s (PSX) dividend yield has contracted from 3.3% in Q3 2016 to 2.7% currently. Delek US Holdings’ (DK) and HollyFrontier’s (HFC) dividend yields have fallen from 3.6% and 5.3%, respectively, in Q3 2016, to 2.3% and 1.9%, respectively, currently.

In the next part, we’ll estimate what VLO stock might do before Valero releases its third-quarter earnings.

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