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Valero Energy Rewards Investors with Quarterly Dividend Hike

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Leading refiner Valero Energy CorporationVLO recently announced that it has received approval from board of directors to increase its quarterly dividend.

The new dividend of 70 cents per share is 16.7% higher than the prior figure of 60 cents. The increased dividend will be paid on Mar 7, to shareholders on record as of Feb 15. Based on closing price of $67.37 per share on Jan 26, 2017, the stock has a dividend yield of 4.2%.

The company has a solid track record of increasing quarterly dividend, which reflects its financial strength. In fact, Valero's Current Ratio, which reflects a company's liquidity, is better than other refining companies. To be precise, Valero's Current Ratio is 2.05 compared with 1.18 for Phillips 66 PSX , 1.51 for Marathon Petroleum Corporation MPC and 1.90 for Tesoro Corporation TSO .

San Antonio, TX-based Valero - the largest independent refiner and marketer of petroleum products in the U.S - is expected to report its fourth-quarter 2016 results before the opening bell on Jan 31, 2017. The Zacks Consensus Estimate for the quarter currently stands at 77 cents. The company has an Earnings ESP of -5.20%.

The company's price chart for the last three months shows that it has outperformed the Zacks categorized Oil Refining & Marketing industry. During the aforesaid period, shares of the refiner gained almost 15% compared with 11.5% improvement for the broader industry.

Moreover, Valero beat the Zacks Consensus Estimate in three of the last four quarters with an average positive earnings surprise of 13.06%.

However, Valero remains exposed to the Brent-WTI spread, which was negative over a considerable portion of the fourth quarter. This may hurt the company's quarterly margin.

As a result, the company carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

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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.

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