Valero (VLO) stock has seen the second-best recovery among its peers in 2019 after Marathon Petroleum (MPC). In the previous article, we learned that Marathon Petroleum had risen 7.5% since January 2. Now, let’s review Valero’s performance.
Valero stock has risen 7.4% since January 2, higher than the SPDR S&P 500 ETF (SPY). SPY has risen 5.3% in the same period. Valero stock has risen more than Phillips 66 (PSX), which has surged 5.9% since January 2.
Valero’s moving averages
On January 2, Valero’s 10-day moving average stood 4.4% below its 30-day moving average. However, now, Valero’s 10-day moving average is 5.4% above its 30-day moving average because of an 11.1% rise in Valero’s 10-day moving average. The crossover indicates short-term technical bullishness.
How is Valero stock positioned after its recent surge?
Valero is trading at a forward PE of 10.1x, higher than the peer average of 9.3x. The higher valuations that the market accords to Valero could be due to its debt position. Valero has a sturdier balance sheet with lower debt in its capital structure.
Further, Valero’s current dividend yield stands at 4.4%, higher than the peer average of 3.4%. Valero has also consistently returned wealth to its shareholders in the form of share buybacks. In 2018, the company paid $1.4 billion in dividends and repurchased $1.7 billion worth of shares.
Valero’s EPS were expected to rise 26% in 2018, far lower than the peer average of 136%. However, the company posted a 49% rise in its adjusted EPS in 2018.
Overall, after its recent recovery, Valero stock has a higher dividend yield but also a higher valuation compared to its peers.
In the next article, we’ll evaluate Phillips 66’s returns.