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Valero Energy Cheers Investors With 12.5% Dividend Increase

Zacks Equity Research

Valero Energy Corporation VLO recently announced approval from its board of directors to hike quarterly dividend.

The new dividend of 90 cents per share — $3.6 per share annualized — represents a sequential increase of 12.5% from 80 cents. The raised dividend will likely be paid on Mar 5, 2019, to stockholders on record as of Feb 13, 2019.  

Over the past several years, Valero Energy has been raising dividends, reflecting the company’s strong commitment to return cash to shareholders. The company’s reliable and stable refining business will probably help it continue paying dividends in the coming quarters. In other words, the free fall in crude through fourth-quarter 2018 and the prevailing weakness in commodity prices will likely boost the refiner’s earnings and in turn will drive free cash flow.

Headquartered in San Antonio, TX, Valero Energy is the operator of 15 petroleum refineries located in the United States, United Kingdom and Canada. The massive improvement in U.S. exporting volumes of refined product will likely benefit the company as majority of its refining units are situated in the Gulf Coast area.

Valero Energy, being a leading refiner in the domestic market, has managed to beat the Zacks Consensus Estimate for earnings in all the prior four quarters, the average positive earnings surprise being 6.9%.

The company is scheduled to report fourth-quarter 2018 results on Jan 31. Notably, the Zacks Consensus Estimate for earnings per share has been revised upward in the past 30 days to $1.04 from 79 cents.

Valero Energy Corporation Price

 

Valero Energy Corporation Price | Valero Energy Corporation Quote

Presently, the stock carries a Zacks Rank #3 (Hold). Meanwhile, a few better-ranked players in the energy space are RGC Resources Inc. RGCO, TransCanada Corporation TRP and Golar LNG Partners LP GMLP, with a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.  

RGC Resources has an average positive earnings surprise of 87.6% for the past four quarters.

TransCanada will likely record earnings growth of 2% in 2019.

Golar LNG is expected to post earnings growth of 11.9% in 2019.

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