Valero Energy Operating Margin vs. Return On Equity
| VLO Stock | USD 138.56 1.24 0.89% |
Valero Energy Operating Profit Margin |
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For Valero Energy profitability analysis, we use financial ratios and fundamental drivers that measure the ability of Valero Energy to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well Valero Energy utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between Valero Energy's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of Valero Energy over time as well as its relative position and ranking within its peers.
Valero |
Valero Energy's Revenue Breakdown by Earning Segment
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Is Oil & Gas Refining & Marketing space expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Valero Energy. If investors know Valero will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Valero Energy listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth (0.85) | Dividend Share 4.23 | Earnings Share 11.38 | Revenue Per Share 393.974 | Quarterly Revenue Growth (0.15) |
The market value of Valero Energy is measured differently than its book value, which is the value of Valero that is recorded on the company's balance sheet. Investors also form their own opinion of Valero Energy's value that differs from its market value or its book value, called intrinsic value, which is Valero Energy's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Valero Energy's market value can be influenced by many factors that don't directly affect Valero Energy's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Valero Energy's value and its price as these two are different measures arrived at by different means. Investors typically determine if Valero Energy is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Valero Energy's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.
Valero Energy Return On Equity vs. Operating Margin Fundamental Analysis
Comparative valuation techniques use various fundamental indicators to help in determining Valero Energy's current stock value. Our valuation model uses many indicators to compare Valero Energy value to that of its competitors to determine the firm's financial worth. Valero Energy is rated fifth in operating margin category among its peers. It is rated fourth in return on equity category among its peers reporting about 8.21 of Return On Equity per Operating Margin. At this time, Valero Energy's Operating Profit Margin is very stable compared to the past year. The reason why the comparable model can be used in almost all circumstances is due to the vast number of multiples that can be utilized, such as the price-to-earnings (P/E), price-to-book (P/B), price-to-sales (P/S), price-to-cash flow (P/CF), and many others. The P/E ratio is the most commonly used of these ratios because it focuses on the Valero Energy's earnings, one of the primary drivers of an investment's value.Valero Return On Equity vs. Operating Margin
Operating Margin shows how much operating income a company makes on each dollar of sales. It is one of the profitability indicators which helps analysts to understand whether the firm is successful or not making money from everyday operations.
Valero Energy |
| = | 0.02 % |
A good Operating Margin is required for a company to be able to pay for its fixed costs or payout its debt, which implies that the higher the margin, the better. This ratio is most effective in evaluating the earning potential of a company over time when comparing it against a firm's competitors.
Return on Equity or ROE tells company stockholders how effectually their money is being utilized or reinvested. It is a useful ratio when analyzing company profitability or the management effectiveness given the capital invested by the shareholders. ROE shows how efficiently a company utilizes investments to generate income.
Valero Energy |
| = | 0.14 |
For most industries, Return on Equity between 10% and 30% are considered desirable to provide dividends to owners and have funds for the future growth of the company. Investors should be very careful using ROE as the only efficiency indicator because ROE can be high if a company is heavily leveraged.
Valero Return On Equity Comparison
Valero Energy is currently under evaluation in return on equity category among its peers.
Valero Energy Profitability Projections
The most important aspect of a successful company is its ability to generate a profit. For investors in Valero Energy, profitability is also one of the essential criteria for including it into their portfolios because, without profit, Valero Energy will eventually generate negative long term returns. The profitability progress is the general direction of Valero Energy's change in net profit over the period of time. It can combine multiple indicators of Valero Energy, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
| Last Reported | Projected for Next Year | ||
| Accumulated Other Comprehensive Income | -870 M | -826.5 M | |
| Operating Income | 11.9 B | 12.5 B | |
| Income Before Tax | 11.8 B | 12.4 B | |
| Total Other Income Expense Net | -90 M | -94.5 M | |
| Net Income | 9.1 B | 9.6 B | |
| Income Tax Expense | 2.6 B | 2.7 B | |
| Net Income Applicable To Common Shares | 13.2 B | 13.9 B | |
| Net Income From Continuing Ops | 11.2 B | 11.7 B | |
| Non Operating Income Net Other | 205.8 M | 105.7 M | |
| Interest Income | 371 M | 524.9 M | |
| Net Interest Income | -209 M | -219.4 M | |
| Change To Netincome | 87.3 M | 121.4 M | |
| Net Income Per Share | 25.03 | 26.28 | |
| Income Quality | 1.01 | 0.96 | |
| Net Income Per E B T | 0.75 | 0.53 |
Valero Profitability Driver Comparison
Profitability drivers are factors that can directly affect your investment outlook on Valero Energy. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of Valero Energy position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the Valero Energy's important profitability drivers and their relationship over time.
Use Valero Energy in pair-trading
One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Valero Energy position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Valero Energy will appreciate offsetting losses from the drop in the long position's value.Valero Energy Pair Trading
Valero Energy Pair Trading Analysis
The ability to find closely correlated positions to Valero Energy could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Valero Energy when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Valero Energy - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Valero Energy to buy it.
The correlation of Valero Energy is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Valero Energy moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Valero Energy moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Valero Energy can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.Use Investing Themes to Complement your Valero Energy position
In addition to having Valero Energy in your portfolios, you can quickly add positions using our predefined set of ideas and optimize them against your very unique investing style. A single investing idea is a collection of funds, stocks, ETFs, or cryptocurrencies that are programmatically selected from a pull of investment themes. After you determine your investment opportunity, you can then find an optimal portfolio that will maximize potential returns on the chosen idea or minimize its exposure to market volatility.Did You Try This Idea?
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Check out World Market Map. To learn how to invest in Valero Stock, please use our How to Invest in Valero Energy guide.You can also try the Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
To fully project Valero Energy's future profitability, investors should examine all historical financial statements. These statements provide investors with a comprehensive snapshot of the financial position of Valero Energy at a specified time, usually calculated after every quarter, six months, or one year. Three primary documents fall into the category of financial statements. These documents include Valero Energy's income statement, its balance sheet, and the statement of cash flows.