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Here's Why Valero (VLO) is an Attractive Investment Bet
Valero Energy Corporation (VLO - Free Report) has seen upward earnings estimate revisions for 2022 and 2023 in the past 30 days. The stock, carrying a Zacks Rank #2 (Buy), is likely to witness earnings growth of 909.6% this year.
What’s Favoring the Stock?
Valero is a best-in-class oil refiner involved in producing fuels and products that can meet the demand of modern life. Its refineries are located across the United States, Canada and the U.K. A total of 15 petroleum refineries where Valero has ownership interests have a combined throughput capacity of approximately 3.2 million barrels per day.
The Renewable Diesel business segment of VLO comprises the Diamond Green Diesel (DGD) joint venture. The DGD, a joint venture between Darling Ingredients Inc. and Valero, is a leading renewable fuel producer in North America. Low-carbon fuel policies across the globe primarily are aiding the demand for renewable diesel, therefore driving Valero’s Renewable Diesel business unit.
Valero boasts that its premium refining operations are resilient even when the business operating environment is carbon-constrained. Its refining business has the capabilities to generate handsome cashflows that would allow it to return capital to shareholders and back growth projects.
Other Stocks to Consider
Other prospective players in the energy space include Marathon Petroleum Corporation (MPC - Free Report) , PBF Energy Inc. (PBF - Free Report) and Equinor ASA (EQNR - Free Report) . All the stocks carry a Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Marathon Petroleum is a well-known name in the downstream space and is the operator of the largest refining system in the nation. MPC has a strong focus on returning capital to shareholders. Over the past 30 days, Marathon Petroleum has witnessed upward earnings estimate revisions for 2022 and 2023.
PBF Energy is a leading North American independent refiner. The company is highly inclined to reduce debt load and has reinstated its regular quarterly dividend. Over the past seven days, PBF Energy has witnessed upward earnings estimate revisions for 2022 and 2023.
On the Norwegian continental shelf, Equinor is the largest producer of natural gas. In Europe, it is the second largest in terms of supplying gas. According to Equinor, its most important markets for gas in Europe are England, France and Germany. These reflect the degree of dependence of Europe on Equinor for gas.