Company Overview - Valero Energy Corporation (VLO) has a market cap of $61.8 billion and operates in the production and marketing of petroleum-based and low-carbon transportation fuels and petrochemical products through its Refining, Renewable Diesel, and Ethanol segments [1] Stock Performance - Over the past 52 weeks, VLO stock has increased by 51.7%, significantly outperforming the S&P 500 Index, which rose by 14.9% during the same period [2] - Year-to-date, VLO shares are up nearly 24%, compared to a modest 1.1% gain for the S&P 500 [2] - VLO has also outperformed the State Street Energy Select Sector SPDR ETF (XLE), which saw a 20.2% increase over the past year [3] Financial Performance - In Q4 2025, Valero reported an adjusted EPS of $3.82 and revenue of $30.37 billion, exceeding expectations; however, shares fell slightly due to concerns over declining full-year profitability, with net income expected to decrease to $2.3 billion ($7.57 per share) from $2.8 billion ($8.58 per share) in 2024 [6] - Operating income in the Renewable Diesel segment fell to $92 million from $170 million year-over-year, contributing to investor caution [6] Future Projections - Analysts forecast a 15.8% year-over-year growth in adjusted EPS for the fiscal year ending December 2026, projecting it to reach $12.29 [7] - Valero has a strong earnings surprise history, having beaten consensus estimates in the last four quarters [7] Analyst Ratings - Among 22 analysts covering Valero, the consensus rating is a "Moderate Buy," consisting of 12 "Strong Buy" ratings, one "Moderate Buy," and nine "Holds" [7] - Citi analyst Vikram Bagri raised Valero's price target to $212 while maintaining a "Neutral" rating, with the stock currently trading above the mean price target of $193.95 [8] - The highest price target of $220 suggests a potential upside of 8.6% from current levels [8]

Group 1 - Citigroup has raised the target price for Valero Energy (VLO.US) from $190 to $212 [1]

Company Overview - Valero Energy (VLO) is headquartered in San Antonio and operates in the Oils-Energy sector [3] - The stock has experienced a price change of 19.26% since the beginning of the year [3] Dividend Information - Valero Energy currently pays a dividend of $1.13 per share, resulting in a dividend yield of 2.47% [3] - The Oil and Gas - Refining and Marketing industry's average yield is 2.49%, while the S&P 500's yield is 1.36% [3] - The company's annualized dividend of $4.80 has increased by 6.2% from the previous year [4] - Over the last five years, Valero Energy has raised its dividend three times, averaging an annual increase of 3.05% [4] - The current payout ratio is 42%, indicating that 42% of its trailing 12-month EPS is distributed as dividends [4] Earnings Growth - The Zacks Consensus Estimate for Valero Energy's earnings in 2026 is $12.27 per share, with an expected increase of 15.65% from the previous year [5] - Strong earnings growth is anticipated for the current fiscal year [5] Investment Considerations - Valero Energy is considered a compelling investment opportunity due to its strong dividend profile and current Zacks Rank of 3 (Hold) [6] - Income investors should note that high-yielding stocks may face challenges during periods of rising interest rates [6]

Group 1 - Oil prices have risen for the second consecutive day due to geopolitical tensions following the U.S. downing of an Iranian drone near an aircraft carrier, with WTI crude approaching $64 per barrel and Brent crude above $67 per barrel [1] - The American Petroleum Institute reported a decrease of 11.1 million barrels in U.S. crude oil inventories last week, which, if confirmed by official data, would mark the largest weekly decline since June [4] - Concerns about potential conflicts in the Middle East, a region that accounts for about one-third of global oil production, have contributed to rising oil prices despite signs of oversupply [4] Group 2 - The energy sector in the U.S. stock market has also seen gains, with the S&P Energy sector rising by 3.24%, and notable increases in companies such as Valero Energy (VLO.US) and Marathon Oil (MPC.US) by 6% [5] - ExxonMobil (XOM.US) and Occidental Petroleum (OXY.US) saw increases of over 3%, while Chevron (CVX.US) and Devon Energy (DVN.US) rose by 2% [5] Group 3 - The geopolitical situation is further complicated by incidents such as the harassment of a U.S.-flagged tanker by Iranian vessels in the Strait of Hormuz, a critical trade route for oil and liquefied natural gas [4] - OPEC+ is expected to see a gradual increase in global oil demand starting from March or April, which may help balance market supply and demand [4]

Core Insights - Valero Energy Corporation (NYSE:VLO) is recognized as one of the top American oil and gas stocks to invest in, highlighting its strong market position and potential for growth [1][5]. Financial Performance - Valero Energy reported impressive Q4 2025 results, surpassing Wall Street expectations for both earnings and revenue, driven by improved refining margins and increased throughput volume [2][3]. - The refining margin per barrel increased by over 61% year-over-year to $13.61, while average throughput volume rose to 3.1 million barrels per day, up from nearly 3 million bpd in the same quarter last year [3]. - The adjusted earnings per share (EPS) for the quarter was $3.82, exceeding forecasts by $0.55 [3]. Cash Flow and Shareholder Returns - For the fiscal year 2025, Valero generated $6 billion in adjusted net cash from operating activities and returned $4 billion to shareholders, resulting in a payout ratio of 67% [4]. - The company raised its quarterly dividend by over 6% to $1.20 per share, providing an annual dividend yield of 2.61% [4].

Core Insights - The article discusses the current state of the oil and gas market, highlighting the best American stocks to invest in amidst rising oil prices and supply disruptions [2][4]. Oil Market Overview - WTI crude oil futures have increased by over 14% since the start of 2026, currently priced around $65.5 per barrel, driven by supply disruptions from Kazakhstan and a winter storm that reduced U.S. production by approximately 1.5 million barrels per day at its peak [2][3]. - Tensions between Washington and Tehran raise concerns about potential disruptions in oil flows from the Middle East, which supplies about one-third of global oil [3]. Natural Gas Market Overview - Natural gas prices surged over 62% earlier in the month due to increased heating demand from an Arctic blast, although prices have since declined as traders took profits [4]. Company Highlights - **Devon Energy Corporation (NYSE:DVN)**: - Engaged in oil and natural gas production, with 59 hedge fund holders. Price target raised from $37 to $43 by Wells Fargo, maintaining an 'Overweight' rating [8][10]. - Susquehanna also raised its price target from $42 to $45, indicating a 13% upside from current levels [10]. - **Valero Energy Corporation (NYSE:VLO)**: - A leading independent petroleum refiner with 60 hedge fund holders. Reported strong Q4 2025 results, beating earnings and revenue estimates [12][13]. - Refining margin per barrel increased over 61% YoY to $13.61, with average throughput volume rising to 3.1 million barrels per day [13]. - Adjusted EPS for Q4 was $3.82, exceeding forecasts by $0.55, and the company returned $4 billion to shareholders, resulting in a payout ratio of 67% [14].

Core Viewpoint - Valero Energy (VLO) shares have performed strongly over the past year, gaining 35% due to a favorable refining macro environment compared to 12 months ago [1] Company Performance - The company reported another strong quarter, indicating continued robust performance [1] - Ongoing capital returns have supported the share price, contributing to its strong performance [1]

Core Viewpoint - Valero Energy (VLO) shares have performed strongly over the past year, gaining 35% due to a favorable refining macro environment compared to 12 months ago [1] Company Performance - The company reported another strong quarter, indicating continued robust performance [1] - Ongoing capital returns have supported the share price, contributing to its strong performance [1]

Core Insights - Valero Energy Corporation (VLO) reported fourth-quarter 2025 adjusted earnings of $3.82 per share, exceeding the Zacks Consensus Estimate of $3.22, and significantly up from 64 cents per share in the same quarter last year [1][9] - Total quarterly revenues decreased slightly from $30.8 billion in the prior-year quarter to $30.4 billion, but still surpassed the Zacks Consensus Estimate of $28.1 billion [1][2] Financial Performance - The improved quarterly results were driven by increased refining margins, higher ethanol production volumes, and lower total cost of sales, although these were partially offset by a decline in renewable diesel margins [2] - Valero's total cost of sales amounted to $28,468 million, down from $30,127 million in the previous year, attributed to a decrease in the cost of materials and other expenses [10] Dividend Announcement - Valero Energy increased its quarterly cash dividend to $1.20 per share, representing a 6% increase from the previous dividend of $1.13 per share, payable on March 9, 2026, to shareholders of record as of February 5, 2026 [3] Segment Performance - Adjusted operating income in the Refining segment reached $1,733 million, up from $441 million in the year-ago quarter, supported by a higher refining margin per barrel [4] - The Ethanol segment reported an adjusted operating profit of $117 million, up from $20 million in the prior-year quarter, aided by higher production volumes and increased margins [4] - Operating income in the Renewable Diesel segment fell to $92 million from $170 million in the year-ago quarter, impacted by a decline in sales volume and margins [5] Throughput Volumes - Valero's refining throughput volumes totaled 3,113 thousand barrels per day (MBbls/d), an increase from 2,995 MBbls/d in the previous year [6][9] - The Gulf Coast region contributed approximately 59.8% to the total throughput volume, with other regions accounting for 14.8% (Mid-Continent), 16.8% (North Atlantic), and 8.5% (West Coast) [7] Margins and Expenses - The refining margin per barrel of throughput increased to $13.61 from $8.44 in the prior year, while refining operating expenses per barrel rose to $5.03 from $4.67 [8] - Valero's adjusted refining operating income was $6.05 per barrel of throughput compared to $1.60 a year ago [8] Capital Investment and Balance Sheet - The fourth-quarter capital investment totaled $412 million, with $368 million allocated toward sustaining the business [11] - At the end of the fourth quarter, Valero had cash and cash equivalents of $4.7 billion, total debt of $8.3 billion, and finance-lease obligations of $2.4 billion [11]

Core Viewpoint - Valero Energy has engaged with three authorized sellers of Venezuelan crude and will purchase barrels from all three of them [1] Group 1 - Valero Energy is actively expanding its crude oil sourcing by engaging with multiple sellers [1]