A portfolio of stocks I've been building since September 3, 2019, named Volio, will eventually hold 52 dividend dogs. Volio is the fifth portfolio I've built (at a one dividend dog per-week pace) since 2014. Five portfolios = V for Volio!
Today I'm reviewing the fifth of five energy sector stocks primed to join Volio as the third of three representing the sector. One of the stocks I discuss this week could be the forty-seventh overall Volio selection!
My subject today is another large-cap refining and marketing company named, Valero Energy Corp. Its trading ticker is VLO. This is my first report on Valero for Volio.
Valero Energy is one of the largest independent refiners in the United States. It operates 14 refineries with a total throughput capacity of 3.1 million barrels a day in the United States, Canada, and the United Kingdom.
Valero also owns 14 ethanol plants with a capacity of 1.7 billion gallons of ethanol a year and holds a 50% stake in Diamond Green Diesel, which has the capacity to produce 275 million gallons per year of renewable diesel.
It markets its refined products through a wholesale rack and bulk markets; and through approximately 7,000 outlets under the Valero, Beacon, Diamond Shamrock, Shamrock, Ultramar, and Texaco brand names.
The company was formerly known as Valero Refining and Marketing Company and changed its name to Valero Energy Corporation in August 1997. Valero Energy Corporation was founded in 1980 and is headquartered in San Antonio, Texas.
I use three key data points to gauge dividend equities or funds like Valero Energy Corp:
(1) Price
(2) Dividends
(3) Returns
Those three basic keys best tell whether a company has made, is making, and will make money.
VLO Price
Valero's price per share closed at $57.25 yesterday. A year ago their price was $86.17. Price fell $28.94 or over 33.5% last year.
Assuming Valero's stock trades in the range of $20 to $80 this next year, its recent $57.25 price might rise by $7.75 to reach $65.00 by July 24, 2021.
VLO Dividends
Valero's most recent declared quarterly dividend was $0.98, payable September 2nd. That $0.98 Q dividend equates to $3.92 annually for a yield of 6.85% at yesterday's $57.25 share price.
VLO Gains?
Adding the $3.92 annual estimated dividend to my $7.75 optimistic estimate of Valero's price upside shows an $11.67 potential gross gain, per share, to be reduced by any costs to trade the shares.
If we put little under $1,000.00 today in Valero Energy Corp we would buy 17 shares of VLO stock.
A $10 broker fee paid half at purchase and half at sale could cost us about $0.42 per share.
Subtract that $0.42 brokerage cost from my estimated $11.67 gross gain per share results in a net gain of $11.25 X 17 shares = $191.25 for a 19.1% net gain on a $973.25 investment.
Thus, Valero Energy Corp shows a possible 19.1% net gain including a 6.85% dividend yield. It could be more, it could be less.
The above speculation is based on past performance and supposition. Only time and money invested will tell if Valero Energy Corp is worth it.
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