# Valero Energy (VLO.US)

Canonical: https://gigainvestors.com/s/VLO

Analysis as of: 2026-10-16T07:32:53.066Z. Financial observations: FY1996–FY2025.

Listing currency: USD. Reporting currency: USD.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: $444.06 per share; close as of 2026-10-15.

Estimated value: low $209.75 per share, central $236.46 per share, high $272.01 per share. Buy at or below the central value $236.46 per share. Valuation as of 2026-10-16T07:32:53.066Z; scenarios are not confidence intervals.

Expected annual return: 6.5% at the stated quote. About 6.5% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: fail

- 6 revenue declines in the last 10 years

- more than 5 revenue declines in ten years

- operating margin variation exceeds 0.35

- Financial history: 10 years

- Years with declining revenue: 6

- Years with a net loss: 1

- Operating margin variation: 0.77×

Chart: Operating margin; fiscal year observations.

- FY2016: 0.05×

- FY2017: 0.04×

- FY2018: 0.04×

- FY2019: 0.04×

- FY2020: -0.02×

- FY2021: 0.02×

- FY2022: 0.09×

- FY2023: 0.08×

- FY2024: 0.03×

- FY2025: 0.04×

### moat: fail

- ROIC median below threshold

- ROIC worst years below threshold (more than 1 bad year allowed)

- ROIC, median of available years: 11.1%

- ROIC, second-lowest year: 6.3%

- Typical minus recent gross margin: 0.2 pp

- Typical gross margin (annual median): 4.6%

- Recent gross margin (lower of latest and 3-year median): 4.4%

- Years with nonpositive capital: 0

- Capital spending / revenue: 1.5%

- ROIC including acquisitions, ten-year median: 12.5%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2016: 11.7%

- FY2017: 14.4%

- FY2018: 13.2%

- FY2019: 10.2%

- FY2020: -4.0%

- FY2021: 6.3%

- FY2022: 40.1%

- FY2023: 27.7%

- FY2024: 9.8%

- FY2025: 10.6%

### economics: fail

- incremental invested capital return below threshold

- Owner earnings / net income, 5-yr: 1.28×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $34B

- Net income, five-year total: $26B

- Return on incremental invested capital: 0.0%

- Working capital / revenue, annual change: -0.1 pp

- Working capital / revenue, change between three-year averages: -0.2 pp

- Working capital / revenue, final three-year average: 5.4%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 1.80×

- FY2022: 1.07×

- FY2023: 1.20×

- FY2024: 1.62×

- FY2025: 2.01×

### management: pass

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- potential debt-funded buybacks (informational)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 13.2% vs 10.6%

- Per-share earnings: 7.98 to 8.60 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: -4.7%

- Ordinary dilution, 5-year annual growth: -5.4%

- Market cap gain: $19B

- Cumulative retained earnings: $22B

- Diluted shares, 10-year annual growth: -4.7%

- Diluted shares, 5-year annual growth: -5.4%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value growth: 0.9%

- Per-share value change: $0.62

- Per-share value, starting three-year median: $7.98

- Per-share value, ending three-year median: $8.60

- Buybacks concentrated in cheaper years (correlation): 0.68

- Average buyback yield: 5.1%

- Buyback history: 10 years

- Debt-funded buybacks: Yes

- Acquisition spending: $425M

- Cumulative net income, 10 years: $37B

- ROIC, first three-year median: 13.2%

- ROIC, last three-year median: 10.6%

Chart: Earnings per share; fiscal year observations.

- FY2016: $4.93

- FY2017: $9.16

- FY2018: $7.29

- FY2019: $5.85

- FY2020: -$3.50

- FY2021: $2.29

- FY2022: $29.11

- FY2023: $25.03

- FY2024: $8.60

- FY2025: $7.60

### accounting: pass

- Sloan accruals: -6.0%

- Receivables to sales index (DSRI): 0.98×

- Restructuring years, last five: 1

- Stock compensation / operating cash flow: 0.0%

- Earnings backed by cash: Yes

- Operating cash / earnings: 2.48×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.02×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -5.5%

- FY2017: -2.8%

- FY2018: -2.5%

- FY2019: 3.9%

- FY2020: -4.7%

- FY2021: 0.8%

- FY2022: 17.8%

- FY2023: -0.6%

- FY2024: -6.5%

- FY2025: -6.0%

## Holders

- [Christopher Bloomstran](https://gigainvestors.com/SA): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Price needs cash profits to grow 9.2% a year for ten years · "Valero Q1 Earnings Top Estimates on Stronger Refining Margins" (finance.yahoo.com, Apr 2026) · sales -5.5%

Story as of 2026-10-16T09:59:48.177Z; price observation 2026-10-15.

Price needs cash profits to grow 9.2% a year for ten years

- 2025-04-24: Valero Energy reports first-quarter loss on lower margins, impairment charges ([ca.finance.yahoo.com](https://ca.finance.yahoo.com/news/valero-energy-reports-first-quarter-104033854.html))

- 2025-09-03: BofA lifts Valero rating on heavy crude advantage but downgrade Phillips 66 ([finance.yahoo.com](https://finance.yahoo.com/news/bofa-lifts-valero-rating-heavy-130731984.html))

- 2026-02-11: Valero Energy (VLO) Posts Impressive Q4 Results Following Rebound in Margins ([finance.yahoo.com](https://finance.yahoo.com/news/valero-energy-vlo-posts-impressive-191318694.html))

- 2026-03-24: Rising Fuel Prices Are Lifting Valero Stock. Why a Refinery Fire Can’t Stop It. ([finance.yahoo.com](https://finance.yahoo.com/m/eea0b8ee-8386-3d42-897e-a7ca5068a105/rising-fuel-prices-are.html))

- 2026-07-10: Valero Energy (VLO) Could Gain From Cheaper Crude As Refining Margins Hold ([finance.yahoo.com](https://finance.yahoo.com/energy/articles/valero-energy-vlo-could-gain-012434429.html))

- 2026-08-18: Diesel Margins Soar to Record High. Valero and Marathon Stocks Are Winning. ([finance.yahoo.com](https://finance.yahoo.com/m/a5cfcf07-08a8-37f4-8f63-d6bc0cad0522/diesel-margins-soar-to-record.html))

### Sales · FY2024–2025

sales -5.5%; source https://www.sec.gov/Archives/edgar/data/1035002/000162828026011499/vlo-20251231.htm; observed 2026-02-25.

- FY2016: $76B 

- FY2017: $94B 

- FY2018: $117B 

- FY2019: $108B 

- FY2020: $65B 

- FY2021: $114B 

- FY2022: $176B 

- FY2023: $145B 

- FY2024: $130B 

- FY2025: $123B 

### Gross margin · FY2025

gross margin 4.4%; source https://www.sec.gov/Archives/edgar/data/1035002/000162828026011499/vlo-20251231.htm; observed 2026-02-25.

- FY2016: 5.7% 

- FY2017: 4.8% 

- FY2018: 4.7% 

- FY2019: 4.4% 

- FY2021: 2.7% 

- FY2022: 9.5% 

- FY2023: 8.9% 

- FY2024: 3.7% 

- FY2025: 4.4% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in oil & gas refining & marketing; annual sales are USD 122.7 billion.

- Source: https://www.sec.gov/Archives/edgar/data/1035002/000162828026011499/vlo-20251231.htm (filed 2026-02-25); FY2025: revenue 122687000000; grossProfit 5369000000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); VLO.US: Valero Energy Corporation manufactures, markets, and sells petroleum-based and low-carbon liquid transportation fuels and petrochemical products in the United States, Canada, the United Kingdom, Ireland, Latin America, Mexico, Peru, and internationally. It operates through three segments: Refining, Renewable Diesel, and Ethanol. The company produces California Reformulated Gasoline Blendstock for Oxygenate Blending (CARBOB) and Conventional Blendstock for Oxygenate Blending (CBOB) gasolines, CARB diesel, diesel, jet fuel, heating oil, and asphalt; feedstocks; aromatics; sulfur and residual fuel oil; intermediate oils; and sulfur, sweet, and sour crude oils. It sells its refined products through wholesale rack and bulk markets; and through outlets under the Valero, Beacon, Diamond Shamrock, Shamrock, Ultramar, and Texaco brands. The company also owns and operates renewable diesel and ethanol plants, as well as produces and sells renewable diesel, renewable naphtha, and neat sustainable aviation fuel under the Diamond Green Diesel brand name. In addition, it offers ethanol and various co-products, including dry distillers grains, syrup, and inedible distillers corn oil to animal feed customers. The company was formerly known as Valero Refining and Marketing Company and changed its name to Valero Energy Corporation in August 1997. Valero Energy Corporation was founded in 1980 and is headquartered in San Antonio, Texas.

### Why customers stay

Margins ranged from 3.7% to 8.9% during 2023–25; it earns 11.1% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); FY2023: grossProfit / revenue = 8.9%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); FY2024: grossProfit / revenue = 3.7%.

- Source: https://www.sec.gov/Archives/edgar/data/1035002/000162828026011499/vlo-20251231.htm (filed 2026-02-25); FY2025: grossProfit / revenue = 4.4%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); 10-year return on capital observations [[2016,0.1169045721469751],[2017,0.1438851797065526],[2018,0.13156028573299922],[2019,0.10238346608813438],[2020,-0.040141914722445694],[2021,0.0629756287594673],[2022,0.40073151937818874],[2023,0.2768542676455049],[2024,0.09803544865548702],[2025,0.10573750660535153]]; median 0.1113210393761633. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Paid dividends in 10 of 10 years; bought back USD 2.6 billion of shares.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); FY2016: growth capex 0; upkeep 1278000000; owner earnings 2905000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); FY2017: growth capex 0; upkeep 1379000000; owner earnings 4672000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); FY2018: growth capex 3000000; upkeep 2069000000; owner earnings 3122000000. Growth capex / owner earnings = 0.0009609224855861628.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); FY2019: growth capex 0; upkeep 1997000000; owner earnings 2680000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); FY2021: growth capex 0; upkeep 1665000000; owner earnings 1670000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); FY2022: growth capex 0; upkeep 1681000000; owner earnings 12320000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); FY2023: growth capex 0; upkeep 911000000; owner earnings 10625000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); FY2024: growth capex 0; upkeep 907000000; owner earnings 4490422488.35662. Growth capex / owner earnings = 0.

- Source: https://www.sec.gov/Archives/edgar/data/1035002/000162828026011499/vlo-20251231.htm (filed 2026-02-25); FY2025: growth capex 0; upkeep 796000000; owner earnings 4710000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); Dividend observations: [[2016,1111000000],[2017,1242000000],[2018,1369000000],[2019,1492000000],[2020,1600000000],[2021,1602000000],[2022,1562000000],[2023,1452000000],[2024,1384000000],[2025,1405000000]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://www.sec.gov/Archives/edgar/data/1035002/000162828026011499/vlo-20251231.htm (filed 2026-02-25); FY2025: cash repurchases 2598000000 USD.

### Are managers owners

Insiders own 0.4% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); VLO.US SharesStats.PercentInsiders = 0.42100000000000004 percentage points; cache date 2026-10-16.

### What could break it

"Our financial results are affected by volatile margins" (SEC filing, Feb 2026)

- Source: https://www.sec.gov/Archives/edgar/data/1035002/000162828026011499/vlo-20251231.htm (filed 2026-02-25); Our financial results are affected by volatile margins

### What the price says

The price assumes cash profits grow 9.2% yearly over ten years; actual growth was 6.1%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); Ten-year compound average after fade. Initial solved rate 0.11979973598201676. Price 444.06; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2015 owner earnings/share 8.428 → FY2025 15.242718446601941. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-10: $59.24 per share

- 2016-11: $61.56 per share

- 2016-12: $68.32 per share

- 2017-01: $65.76 per share

- 2017-02: $67.95 per share

- 2017-03: $66.29 per share

- 2017-04: $64.61 per share

- 2017-05: $61.47 per share

- 2017-06: $67.46 per share

- 2017-07: $68.97 per share

- 2017-08: $68.10 per share

- 2017-09: $76.93 per share

- 2017-10: $78.89 per share

- 2017-11: $85.62 per share

- 2017-12: $91.91 per share

- 2018-01: $95.97 per share

- 2018-02: $90.42 per share

- 2018-03: $92.77 per share

- 2018-04: $110.93 per share

- 2018-05: $121.20 per share

- 2018-06: $110.83 per share

- 2018-07: $118.35 per share

- 2018-08: $117.88 per share

- 2018-09: $113.75 per share

- 2018-10: $91.09 per share

- 2018-11: $79.90 per share

- 2018-12: $74.97 per share

- 2019-01: $87.82 per share

- 2019-02: $81.56 per share

- 2019-03: $84.83 per share

- 2019-04: $90.66 per share

- 2019-05: $70.40 per share

- 2019-06: $85.61 per share

- 2019-07: $85.25 per share

- 2019-08: $75.28 per share

- 2019-09: $85.24 per share

- 2019-10: $96.98 per share

- 2019-11: $95.49 per share

- 2019-12: $93.65 per share

- 2020-01: $84.31 per share

- 2020-02: $66.25 per share

- 2020-03: $45.36 per share

- 2020-04: $63.35 per share

- 2020-05: $66.64 per share

- 2020-06: $58.82 per share

- 2020-07: $56.23 per share

- 2020-08: $52.59 per share

- 2020-09: $43.32 per share

- 2020-10: $38.61 per share

- 2020-11: $53.77 per share

- 2020-12: $56.57 per share

- 2021-01: $56.43 per share

- 2021-02: $76.98 per share

- 2021-03: $71.60 per share

- 2021-04: $73.96 per share

- 2021-05: $80.40 per share

- 2021-06: $78.08 per share

- 2021-07: $66.97 per share

- 2021-08: $66.31 per share

- 2021-09: $70.57 per share

- 2021-10: $77.33 per share

- 2021-11: $66.94 per share

- 2021-12: $75.11 per share

- 2022-01: $82.97 per share

- 2022-02: $83.51 per share

- 2022-03: $101.54 per share

- 2022-04: $111.48 per share

- 2022-05: $129.60 per share

- 2022-06: $106.28 per share

- 2022-07: $110.77 per share

- 2022-08: $117.12 per share

- 2022-09: $106.85 per share

- 2022-10: $125.55 per share

- 2022-11: $133.62 per share

- 2022-12: $126.86 per share

- 2023-01: $140.03 per share

- 2023-02: $131.73 per share

- 2023-03: $139.60 per share

- 2023-04: $114.67 per share

- 2023-05: $107.04 per share

- 2023-06: $117.30 per share

- 2023-07: $128.91 per share

- 2023-08: $129.90 per share

- 2023-09: $141.71 per share

- 2023-10: $127.00 per share

- 2023-11: $125.36 per share

- 2023-12: $130.00 per share

- 2024-01: $138.90 per share

- 2024-02: $141.46 per share

- 2024-03: $170.69 per share

- 2024-04: $159.87 per share

- 2024-05: $157.14 per share

- 2024-06: $156.76 per share

- 2024-07: $161.72 per share

- 2024-08: $146.73 per share

- 2024-09: $135.03 per share

- 2024-10: $129.76 per share

- 2024-11: $139.08 per share

- 2024-12: $122.59 per share

- 2025-01: $133.00 per share

- 2025-02: $130.73 per share

- 2025-03: $132.07 per share

- 2025-04: $116.09 per share

- 2025-05: $128.97 per share

- 2025-06: $134.42 per share

- 2025-07: $137.31 per share

- 2025-08: $152.01 per share

- 2025-09: $170.26 per share

- 2025-10: $169.56 per share

- 2025-11: $176.76 per share

- 2025-12: $162.79 per share

- 2026-01: $181.43 per share

- 2026-02: $204.64 per share

- 2026-03: $247.08 per share

- 2026-04: $252.58 per share

- 2026-05: $244.82 per share

- 2026-06: $260.44 per share

- 2026-07: $312.90 per share

- 2026-08: $358.92 per share

- 2026-09: $387.61 per share

- 2026-10: $456.46 per share

## Annual estimated value (USD per share)

- FY2016: low $50.26 per share, central $56.20 per share, high $64.12 per share

- FY2017: low $97.77 per share, central $110.02 per share, high $126.33 per share

- FY2018: low $125.11 per share, central $153.58 per share, high $178.85 per share

- FY2019: low $137.59 per share, central $196.12 per share, high $230.20 per share

- FY2020: low $51.45 per share, central $57.87 per share, high $66.40 per share

- FY2021: low $80.26 per share, central $90.70 per share, high $104.60 per share

- FY2022: low $123.82 per share, central $140.43 per share, high $162.53 per share

- FY2023: low $118.06 per share, central $133.35 per share, high $153.71 per share

- FY2024: low $158.32 per share, central $179.34 per share, high $207.31 per share

- FY2025: low $173.05 per share, central $196.03 per share, high $226.61 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/1035002/000162828026011499/vlo-20251231.htm); period 2025-12-31, filed 2026-02-25.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.