Looking for the best value stocks? Tracey Ryniec, Stock Strategist at Zacks Investment Research, discusses two stocks that might be worth a closer look by value investors: Tesoro Corporation (TSO) and Valero Energy Corporation (VLO).
Both refiners have forward P/Es well below the average of the S&P 500, which is now a sky-high level of 18. They also just recently reported record quarters with earnings soaring year over year as operating margins remain favorable.
The refiners are generating tremendous cash flow. Tesoro has already done two dividend increases this year. The Board recently approved another $1 billion in share repurchases. Valero recently raised its dividend 25%. Between dividends and the share buybacks, Valero has given $2.7 billion back to shareholders year to date.
Both stocks are Zacks Rank #2 (Buy).
But given changes in the crack spreads and the shares at new highs, are these two stocks still cheap?
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
VALERO ENERGY (VLO): Free Stock Analysis Report
TESORO CORP (TSO): Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
