Today’s Stock of the Week is a well-diversified energy company that can handle a volatile market. Keep reading to learn more…
Valero Energy Corporation (VLO) gives investors a generous dividend while they await a further rebound in oil prices. It is the largest refinery company in the US, operating in 44 states, six Canadian provinces, the UK and the Caribbean. Its 15 petroleum refineries have capacity for three million barrels a day, and it also operates 11 ethanol plants with capacity for 1.4 billion gallons a year. Valero also has a wind farm, convenience stores, a credit card business and 7,500 retail outlets under well-known names such as Valero, Diamond Shamrock and Texaco.
High-quality energy stocks not only will make it through the current uncertainty of oil prices—they will also thrive longer-term. Valero’s stock is down 5% in the past year but up 180% in the past five years. Revenue of $87.8 billion in 2015 will fall to $73.3 billion this year but should rise again, to $83.5 billion, in 2017. And the dividend of $2.40 share/yr., recently yielding 3.8%, appears secure.
Earnings per share: 2017 est./$5.41… 2016 est./$3.69… 2015/$9.11
This Week’s Expert
Michael Underhill is chief investment officer at Capital Innovations LLC, Pewaukee, Wisconsin, which manages $162 million, and portfolio manager of the $4.5 million RidgeWorth Capital Innovations Global Resources and Infrastructure Fund (INNNX). CapInnovations.com