SAN ANTONIO - Valero Energy Corporation (NYSE:VLO), a leading international manufacturer and marketer of fuels and petrochemical products with a market capitalization of $44.19 billion, announced an increase in its quarterly cash dividend. The dividend on common stock has risen from $1.07 to $1.13 per share, marking a significant step for the company's shareholder return policy. This change elevates the annualized dividend rate to $4.52 per share, resulting in a 3.1% yield. According to InvestingPro data, Valero has maintained dividend payments for 36 consecutive years, demonstrating strong commitment to shareholder returns.
Shareholders of record by the close of business on January 30, 2025, will be eligible for the dividend, which is scheduled for payment on March 3, 2025. This announcement comes ahead of Valero's conference call set for January 30, 2025, where the company will discuss its fourth-quarter and full-year 2024 earnings. The financial results will be released the same day, prior to the conference call. InvestingPro analysis shows the company trading at a P/E ratio of 12.38, with an overall financial health score rated as "GREAT" - detailed insights available in the comprehensive Pro Research Report.
Valero, with its headquarters in San Antonio, operates 15 petroleum refineries across the U.S., Canada, and the U.K., boasting a combined throughput capacity of roughly 3.2 million barrels per day. The company is also involved in producing low-carbon fuels, including renewable diesel and sustainable aviation fuel, through its joint venture in Diamond Green Diesel Holdings LLC. The venture contributes a production capacity of about 1.2 billion gallons per year in the U.S. Gulf Coast region. The stock has shown strong momentum recently, with InvestingPro data showing a notable 10.16% return over the past week.
Additionally, Valero owns 12 ethanol plants in the U.S. Mid-Continent region, which have a combined production capacity of around 1.6 billion gallons per year. The company's operations are managed across three segments: Refining, Renewable Diesel, and Ethanol.
This dividend increase reflects Valero's commitment to delivering value to its shareholders and is based on a press release statement. The company's broad portfolio, including its ventures into low-carbon fuel production, positions it as a significant player in the energy and fuel markets, catering to a diverse range of customers in the U.S., Canada, the U.K., Ireland, and Latin America.
In other recent news, Valero Energy's financial health has been a topic of discussion among analysts. Mizuho (NYSE:MFG) Securities adjusted its outlook on the company, reducing the price target to $158 from the previous $165, while maintaining an Outperform rating. This follows an anticipated fourth-quarter earnings shortfall, with expectations of a 10% and 86% miss on EBITDA and EPS, respectively. Despite this, Mizuho highlighted Valero Energy's status as a top-tier operator with best-in-class assets.
Simultaneously, TD Cowen also adjusted its outlook on Valero, reducing the price target to $140 from the previous $145, while retaining a Buy rating. The firm acknowledged weaker-than-expected earnings, influenced by extensive maintenance activities and ongoing capture headwinds. Nevertheless, Valero has expressed a willingness to leverage its balance sheet during a downturn to support shareholder returns.
Valero Energy recently announced the retirement of Joseph W. Gorder from his role as Executive Chairman and Director, effective December 31, 2024. R. Lane Riggs, the current CEO and President, will assume the additional role of Chairman of the Board.
In terms of earnings, Valero reported a decrease in net income for Q3 2024, dropping to $364 million from $2.6 billion in the same quarter of the previous year. Despite these financial challenges, the company returned $907 million to shareholders in Q3 2024, maintaining a payout ratio of 84%.
Lastly, the delay in the clean fuel tax credit guidelines has reportedly led to a decline in shares of Darling Ingredients (NYSE:DAR), which has a renewable diesel venture with Valero Energy.
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