[View in browser]( [The Spill Logo] Proprietary Data Insights Financial Pros’ Top Oil & Gas Refiner Stock Searches in the Last Month Rank Ticker Name Searches
#1 [VLO]( Valero Energy 33
#2 [PSX]( Phillips 66 21
#3 [MPC]( Marathon Petroleum 20
#4 [SUN]( Sunoco 7
#5 [PBF]( PBF Energy 6
#ad [Decoding Your Finances: The Juice Edition]( Brought to you by [The Alt]( [Beyond Traditional Investments: Embrace Diversity]( [The Alt - Beyond Traditional Investments: Embrace Diversity]( Don't limit your investment horizons to stocks alone. Venture into the realm of AI, Real Estate, Private Equity, NFTs, and more! Our financial experts curate a diverse range of alternative investment content. [Sign up for FREE and broaden your investment knowledge with The Alt](. Near All-Time Highs, This Stock is Still Cheap Green energy may be the way of the future. But we’ll need fossil fuels to get there. Financial pros made Valero (VLO) their top oil & gas refiner search over the last month, according to our TrackStar data. This well-known energy player trades at just 4x cash and pays a 2.9% dividend yield. Even near all-time highs, this stock is extremely cheap, and here’s why. Valero’s Business The energy supply chain divides into three segments: exploration & production (E&P), transportation, and refining & marketing. E&P companies live and die by the price of oil and natural gas. Transportation companies don’t care about the price of the commodity, just the volume moved. Refining & marketing companies look at the ‘crack spread.’ This is the difference between the cost of the commodity and the price they get at the pump less their refining costs. Generally, higher energy prices benefit refiners, though not as directly as E&P companies. Valero is the largest independent refiner in North America with 15 refineries capable of producing 3.2 million barrels a day. Plus, they operate a network of over 7,000 retail and wholesale branded outlets. [Projects] [Source: Valero Investor Relations]( Nearly all of Valero’s revenue comes from refining & marketing, though ethanol and renewable diesel are growing quickly. Financials [Financials] Source: Stock Analysis Valero’s revenues and margins grew spectacularly in the last few years thanks to higher commodity prices which translated into higher fuel prices. Gross margins are nearly double what they were prepandemic, while free cash flow has nearly tripled. Total debt at $11.4 billion is down from $15.8 billion during the pandemic and now in line with historical norms. Besides its healthy dividend, Valero has bought back shares reducing the total outstanding from 409.2 million in 2021 to 340.5 million as of the last report. Valuation [Valuation] Source: Seeking Alpha As a whole, refiners are cheap. Marathon Petroleum (MPC) has the most expensive P/E ratio at 11.7x, barely above Valero’s 10.0x. Sunoco’s (SUN) 15.3x cash is about 4x more expensive than Valero’s. However, PBF Energy (PBF) trades at just 3.0x cash and MPC at 3.6x cash. Even if you look at the price to free-cash-flow, which removes Capex, Valero only trades at 4.6x FCF. That’s effectively +20% return per year if nothing changes. Growth [Growth] Source: Seeking Alpha Revenue growth slid this year. However, that was bound to happen after tremendous gains since the pandemic. That pullback flowed through to all other profitability metrics for nearly every refiner. Yet, the three and five-year CAGR for EBITDA is simply stunning. Profitability [Profit] Source: Seeking Alpha Now, Valero doesn’t have the best gross margins. But it’s close to the top regarding EBIT, net income, and free cash flow margin. That’s why you see its returns on equity, assets, and total capital at or near the top of the group. Our Opinion 10/10 Short of a collapse in the energy market, Valero is well-positioned to generate oodles of cash for shareholders over the next several years. Yes, it’s near all-time highs. But at 4.6x free-cash-flow, that’s sort of a moot point. [-facebook-share]( [-twitter-share]( [-linkedin-share]( [-email-share](mailto:?body= %3Cbr+%2F%3E%0A%3Cb%3ENotice%3C%2Fb%3E%3A++Undefined+property%3A+stdClass%3A%3A%24previewText+in+%3Cb%3E%2Fvar%2Fwww%2Fhtml%2Fnl_forms%2Fsrc%2FICTheSpill%2Fautomate-ic-article.php%3C%2Fb%3E+on+line+%3Cb%3E102%3C%2Fb%3E%3Cbr+%2F%3E%0Ahttps%3A%2F%2Finvestingchannel.com%2F%3Fp%3D605949?utm_medium=ic-nl&utm_source=116106 ) News & Insights Just Spilled - [Don’t Let This Popular Crypto Stock Fool You](
- [How To Invest $500 For Retirement](
- [Financial Pros Flock to Hot New Bitcoin ETFs](
- [Housing: It’s A Bad News, Bad News Situation]( [News & Insights-facebook-share]( [News & Insights-twitter-share]( [News & Insights-linkedin-share]( [News & Insights-email-share](mailto:?body= %3Cbr+%2F%3E%0A%3Cb%3ENotice%3C%2Fb%3E%3A++Undefined+property%3A+stdClass%3A%3A%24previewText+in+%3Cb%3E%2Fvar%2Fwww%2Fhtml%2Fnl_forms%2Fsrc%2FICTheSpill%2Fautomate-ic-article.php%3C%2Fb%3E+on+line+%3Cb%3E102%3C%2Fb%3E%3Cbr+%2F%3E%0Ahttps%3A%2F%2Finvestingchannel.com%2F%3Fp%3D605949?utm_medium=ic-nl&utm_source=116106 ) [We want to hear from you. Let us know your thoughts by clicking here]( [Ads] [InvestingChannel Logo](#) Follow us on: [Facebook Logo]( [LinkedIn Logo]( [Twitter Logo]( [Instagram Logo]( To ensure delivery of all emails, [allow us on your list](.
Manage your subscriptions with our [preference center](.
[Unsubscribe here.](
View our privacy policy [here](. Copyright ©2024 InvestingChannel. All rights reserved.
1325 Avenue of the Americas, Floor 27 & 28 New York, New York 10019 Disclaimer: This is not investment advice. This InvestingChannel, Inc., newsletter is for information purposes only and is based on opinion. Futures, forex, stock, and options trading are not appropriate for all investors. There is a substantial risk of loss associated with trading these markets. Losses can and will occur. No system or methodology has ever been developed that can ensure returns or eliminate losses. InvestingChannel, Inc., makes no representation or implication that using any of the methodologies or systems in this newsletter will generate returns or insure against losses. Investors should be cautious about any and all investments and are advised to conduct their own due diligence prior to making any investment decisions. [Link](