Valero Energy Corporation VLO is a leading refiner with a diversified business model, spanning traditional refining, renewable diesel and ethanol operations. The company operates a robust network of 14 refineries with a throughput capacity of 3 million barrels per day. VLO generates revenues by producing and marketing transportation fuels like gasoline, diesel and jet fuel. Its low-cost operations enable the company to maintain steady profitability and generate strong cash flow across volatile commodity cycles.
Since 2021, Valero has returned $42.4 billion to its shareholders through dividends and share buybacks, reducing its outstanding share count by 46%. This capital return momentum continued into the first quarter of 2026, when the company returned $938 million to shareholders. This payout represented 59% of adjusted net cash from operating activities compared with Valero’s minimum payout target of 40 to 50 percent. The company has steadily increased its annual dividend from 65 cents per share in 2012 to an annualized equivalent of $4.08 in 2026, driven by a recent 6% increase.
Valero continues to invest in high-return growth projects focused on refining optimization, export infrastructure and low-carbon fuels, which are expected to strengthen margins and improve free cash flow generation. Key projects such as the Port Arthur coker, alkylation units and logistics expansions improve crude flexibility, product yields and access to higher-margin export markets, supporting stronger profitability across commodity cycles.
At the same time, investments in renewable diesel, sustainable aviation fuel (SAF), ethanol and carbon capture position Valero to benefit from rising global clean-fuel demand and supportive environmental policies. These projects are expected to drive incremental cash flow, enabling enhanced shareholder returns through dividend growth and share buybacks.
Are PBF & PSX Focused on Rewarding Their Shareholders?
PBF Energy Inc. PBF and Phillips 66 PSX generate enough revenues and cash flow, allowing them to return capital to shareholders through dividends and share buybacks.
PBF Energy generates revenues through the sale of refined petroleum products, including gasoline, diesel, jet fuel and heating oil, to wholesale, commercial and retail customers. The company is focused on shareholder returns, distributing approximately $32 million through dividends in March 2026 while returning more than $1 billion through cumulative share repurchases to date. PBF expects to continue share buybacks and dividends as part of its broader capital return strategy to enhance shareholder value.
Like PBF, PSX generates revenues primarily from its downstream operations while benefiting from stable, fee-based earnings in its midstream segment. In first-quarter 2026, Phillips 66 returned $778 million to its shareholders through dividends and share repurchases.
VLO’s Price Performance, Valuation & Estimates
Valero shares have surged 88.6% over the past year compared with 63.8% growth registered by the composite stocks belonging to the industry.
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From a valuation standpoint, VLO trades at a trailing 12-month enterprise-value-to-EBITDA (EV/EBITDA) of 7.29X, above the broader industry average of 5.97X.
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The Zacks Consensus Estimate for VLO's first-quarter 2026 and full-year 2026 earnings has seen upward revisions over the past seven days. Meanwhile, estimates for second-quarter 2026 earnings have seen downward revisions.
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Valero currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
