We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Is Valero Well Positioned to Return Capital to Its Shareholders?
Read MoreHide Full Article
Key Takeaways
Valero has returned $42.4B to its shareholders through dividends and share buybacks since 2021.
Valero returned $938M to its shareholders in Q1 2026, exceeding its 40-50% payout target.
Investments in coker, SAF, ethanol and export projects are expected to support future cash flows & returns.
Valero Energy Corporation (VLO - Free Report) is a leading refiner with a diversified business model, spanning traditional refining, renewable diesel and ethanol operations. The company operates a robust network of 14 refineries with a throughput capacity of 3 million barrels per day. VLO generates revenues by producing and marketing transportation fuels like gasoline, diesel and jet fuel. Its low-cost operations enable the company to maintain steady profitability and generate strong cash flow across volatile commodity cycles.
Since 2021, Valero has returned $42.4 billion to its shareholders through dividends and share buybacks, reducing its outstanding share count by 46%. This capital return momentum continued into the first quarter of 2026, when the company returned $938 million to shareholders. This payout represented 59% of adjusted net cash from operating activities compared with Valero’s minimum payout target of 40 to 50 percent. The company has steadily increased its annual dividend from 65 cents per share in 2012 to an annualized equivalent of $4.08 in 2026, driven by a recent 6% increase.
Valero continues to invest in high-return growth projects focused on refining optimization, export infrastructure and low-carbon fuels, which are expected to strengthen margins and improve free cash flow generation. Key projects such as the Port Arthur coker, alkylation units and logistics expansions improve crude flexibility, product yields and access to higher-margin export markets, supporting stronger profitability across commodity cycles.
At the same time, investments in renewable diesel, sustainable aviation fuel (SAF), ethanol and carbon capture position Valero to benefit from rising global clean-fuel demand and supportive environmental policies. These projects are expected to drive incremental cash flow, enabling enhanced shareholder returns through dividend growth and share buybacks.
Are PBF & PSX Focused on Rewarding Their Shareholders?
PBF Energy Inc. (PBF - Free Report) and Phillips 66 (PSX - Free Report) generate enough revenues and cash flow, allowing them to return capital to shareholders through dividends and share buybacks.
PBF Energy generates revenues through the sale of refined petroleum products, including gasoline, diesel, jet fuel and heating oil, to wholesale, commercial and retail customers. The company is focused on shareholder returns, distributing approximately $32 million through dividends in March 2026 while returning more than $1 billion through cumulative share repurchases to date. PBF expects to continue share buybacks and dividends as part of its broader capital return strategy to enhance shareholder value.
Like PBF, PSX generates revenues primarily from its downstream operations while benefiting from stable, fee-based earnings in its midstream segment. In first-quarter 2026, Phillips 66 returned $778 million to its shareholders through dividends and share repurchases.
VLO’s Price Performance, Valuation & Estimates
Valero shares have surged 88.6% over the past year compared with 63.8% growth registered by the composite stocks belonging to the industry.
Image Source: Zacks Investment Research
From a valuation standpoint, VLO trades at a trailing 12-month enterprise-value-to-EBITDA (EV/EBITDA) of 7.29X, above the broader industry average of 5.97X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for VLO's first-quarter 2026 and full-year 2026 earnings has seen upward revisions over the past seven days. Meanwhile, estimates for second-quarter 2026 earnings have seen downward revisions.
View the Zacks #1 Rank List
Image: Bigstock
Is Valero Well Positioned to Return Capital to Its Shareholders?
Key Takeaways
Valero Energy Corporation (VLO - Free Report) is a leading refiner with a diversified business model, spanning traditional refining, renewable diesel and ethanol operations. The company operates a robust network of 14 refineries with a throughput capacity of 3 million barrels per day. VLO generates revenues by producing and marketing transportation fuels like gasoline, diesel and jet fuel. Its low-cost operations enable the company to maintain steady profitability and generate strong cash flow across volatile commodity cycles.
Since 2021, Valero has returned $42.4 billion to its shareholders through dividends and share buybacks, reducing its outstanding share count by 46%. This capital return momentum continued into the first quarter of 2026, when the company returned $938 million to shareholders. This payout represented 59% of adjusted net cash from operating activities compared with Valero’s minimum payout target of 40 to 50 percent. The company has steadily increased its annual dividend from 65 cents per share in 2012 to an annualized equivalent of $4.08 in 2026, driven by a recent 6% increase.
Valero continues to invest in high-return growth projects focused on refining optimization, export infrastructure and low-carbon fuels, which are expected to strengthen margins and improve free cash flow generation. Key projects such as the Port Arthur coker, alkylation units and logistics expansions improve crude flexibility, product yields and access to higher-margin export markets, supporting stronger profitability across commodity cycles.
At the same time, investments in renewable diesel, sustainable aviation fuel (SAF), ethanol and carbon capture position Valero to benefit from rising global clean-fuel demand and supportive environmental policies. These projects are expected to drive incremental cash flow, enabling enhanced shareholder returns through dividend growth and share buybacks.
Are PBF & PSX Focused on Rewarding Their Shareholders?
PBF Energy Inc. (PBF - Free Report) and Phillips 66 (PSX - Free Report) generate enough revenues and cash flow, allowing them to return capital to shareholders through dividends and share buybacks.
PBF Energy generates revenues through the sale of refined petroleum products, including gasoline, diesel, jet fuel and heating oil, to wholesale, commercial and retail customers. The company is focused on shareholder returns, distributing approximately $32 million through dividends in March 2026 while returning more than $1 billion through cumulative share repurchases to date. PBF expects to continue share buybacks and dividends as part of its broader capital return strategy to enhance shareholder value.
Like PBF, PSX generates revenues primarily from its downstream operations while benefiting from stable, fee-based earnings in its midstream segment. In first-quarter 2026, Phillips 66 returned $778 million to its shareholders through dividends and share repurchases.
VLO’s Price Performance, Valuation & Estimates
Valero shares have surged 88.6% over the past year compared with 63.8% growth registered by the composite stocks belonging to the industry.
From a valuation standpoint, VLO trades at a trailing 12-month enterprise-value-to-EBITDA (EV/EBITDA) of 7.29X, above the broader industry average of 5.97X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for VLO's first-quarter 2026 and full-year 2026 earnings has seen upward revisions over the past seven days. Meanwhile, estimates for second-quarter 2026 earnings have seen downward revisions.
Image Source: Zacks Investment Research
Valero currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.