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Why Valero Is Poised to Outperform

By Brian D. Pacampara, CFA - Apr 1, 2013 at 9:44AM

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Market-trouncing returns could be written in this 4-Star.

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, oil refining giant Valero Energy (VLO 2.88%) has earned a respected four-star ranking.

With that in mind, let's take a closer look at Valero and see what CAPS investors are saying about the stock right now.

Valero facts

Headquarters (founded)

San Antonio, Texas (1955)

Market Cap

$25.2 billion

Industry

Oil and gas refining and marketing

Trailing-12-Month Revenue

$138.3 billion

Management

Chairman/CEO William Klesse

President/COO Joseph Gorder

Return on Equity (average, past 3 years)

10.5%

Cash/Debt

$1.7 billion / $7.1 billion

Dividend Yield

1.8%

Competitors

BP

Chevron

ExxonMobil

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 96% of the 4,523 members who have rated Valero believe the stock will outperform the S&P 500 going forward.

Just last week, one of those Fools, All-Star BudandMolly, succinctly summed up the Valero bull case for our community:

Refiners have a monopoly on gas production. Due to regulation there is a virtual block to any new refineries or even expansion of existing ones leaving them without competition. Limited production of gasoline keeps prices high and as oil prices come down due to domestic production increases the spread of input costs to output prices increases.

Want to see how well (or not so well) the stocks in this series are performing? Follow the TrackPoisedTo CAPS account.

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Stocks Mentioned

Valero Energy Corporation Stock Quote
Valero Energy Corporation
VLO
$131.81 (2.88%) $3.69

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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