July 13, 2023
Top 10 Stock Valero Strong Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Valero – Top 10 Stock in S&P 500 Index
Valero is listed as a top 10 stock on July 13, 2023 in the market index S&P 500 because of its high performance in at least one of the Obermatt investment strategies. As three out of four consolidated Obermatt Ranks exhibit excellent performance, it is a solid investment where the risk of paying too much for the shares is low, despite a currently slow growth momentum. Based on the Obermatt 360° View of 98 (top 98% performer), Obermatt assesses an overall strong buy recommendation for Valero on July 13, 2023.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Oil & Gas Refining |
| Index | Low Emissions, S&P 500 |
| Size class | XX-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Valero Strong Buy
| 360 METRICS | July 13, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 81 |
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| GROWTH | ||||||||
| GROWTH | 37 |
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| SAFETY | ||||||||
| SAFETY | 90 |
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| SENTIMENT | ||||||||
| SENTIMENT | 88 |
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| 360° VIEW | ||||||||
| 360° VIEW | 98 |
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ANALYSIS: With an Obermatt 360° View of 98 (better than 98% compared with alternatives) for 2023, overall professional sentiment and financial characteristics for the stock Valero are very positive. The 360° View is based on consolidating four consolidated indicators, with half of the indicators below and half above average for Valero. The consolidated Value Rank has an attractive rank of 81, which means that the share price of Valero is on the lower side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 81% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 90. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 88. But the consolidated Growth Rank has a low rank of 37, which means that the company is below average in terms of growth and momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. 63 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 98, Valero is better positioned than 98% of all alternative stock investment opportunities based on the Obermatt Method. Three out of four consolidated Obermatt Ranks show above-average performance. The stock has as good value (Value Rank of 81), secure financing practices (Safety Rank of 90), and positive market sentiment in the professional investor community (Sentiment Rank of 88). It is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely to occur. The company’s growth expectations are below the industry average (Growth Rank of 37), but that could also be temporary since professional investors remain optimistic despite the low growth numbers. The low price as reflected in the good Value Rank could indicate that the company's future is challenging. The below-par growth performance may be the reason for this. Companies that grow less are typically cheaper than fast-growing competitors. We recommend evaluating whether the future of Valero is as difficult as the stock’s low price suggests, despite the positive professional investor sentiment. Since the professional community is optimistic, you might have less to worry about, and the stock may just go through a more challenging phase now, indicating good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for Valero very positive
ANALYSIS: With an Obermatt Sentiment Rank of 88 (better than 88% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock Valero is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all four indicators above average for Valero. Analyst Opinions are at a rank of 78 (better than 78% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. Analyst Opinions Change is also positive with a rank of 54, which means that stock research experts are changing their opinions for the better and recommending investing in the company. They are getting more optimistic about stock investments in Valero. The Professional Investors rank is 73, which means that currently, professional investors hold more stock in this company than in 73% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 65 which means that the current professional news and professional social networks are on the positive side when discussing this company (more positive news than for 65% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 88 (more positive than 88% compared with investment alternatives), Valero has a reputation among professional investors that is significantly higher than that of its competitors. Since all market sentiment indicators are positive, the professional community highly recommends investment in the company. Does this mean Valero stocks are a safe investment? Far from it. Even professionals make mistakes. Especially in stock investing, there is a tendency to follow the leaders. Since trees don't grow to the heavens, such positive sentiment may also be interpreted as a danger sign. A lot of optimism can often be a sign of troubles to come, albeit unforeseen by most. ...read more
Value Strategy: Valero Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 81 (better than 81% compared with alternatives) for 2023, Valero shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Valero. Price-to-Sales is 78 which means that the stock price compared with what market professionals expect for future sales is lower than for 78% of comparable companies, indicating a good value for Valero's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 76% of alternatives, and this is also true for the Price-to-Book capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 50. Compared with other companies in the same industry, dividend yields of Valero are expected to be higher than for 50% of all competitors (a Dividend Yield rank of 50). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 81, is a buy recommendation based on Valero's stock price compared with the company's operational size and dividend yields. Since all value metrics are above the industry average, there is no objection to investing in Valero based on its detailed value metrics.
Growth Strategy: Valero Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 37 (better than 37% compared with alternatives), Valero shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for Valero. Only Capital Growth has a good rank of 92, which means that currently professionals expect the company to grow its invested capital more than 39% of its competitors. The other three indicators are pointing South: Sales Growth has a rank of 4 which means that currently professionals expect the company to grow less than 96% of its competitors. Profit Growth with a rank of 39 and Stock Returns with a rank of 49 are also low (below 51% of alternative investments). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 37, is a hold recommendation for growth and momentum investors. The good news from the invested capital side is surprising. A company with disappointing revenues, profits, and disappointed shareholders typically doesn't invest above average. Overall, the growth momentum for Valero is thus negative. As it is intriguing to see that company executives are optimistic about their investment policy, it is worthwhile looking into the details of the capital investment projects. They may indicate future growth and profits and thus if accompanied by a good value, a sign of good timing to invest in the stock. ...read more
Safety Strategy: Valero Debt Financing Safety very solid
| SAFETY METRICS | July 13, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 62 |
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| REFINANCING | ||||||||
| REFINANCING | 81 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 88 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 90 |
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ANALYSIS: With an Obermatt Safety Rank of 90 (better than 90% compared with alternatives) for 2023, the company Valero has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Valero is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, where all three are above average for Valero. Leverage is at 62, meaning the company has a below-average debt-to-equity ratio. It has less debt than 62% of its competitors. Refinancing is at a rank of 81, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 81% of its competitors. Finally, Liquidity is also good at a rank of 88, which means that the company generates more profit to service its debt than 88% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 90 (better than 90% compared with alternatives), Valero has a financing structure that is significantly safer than that of its competitors. These three positive financing indicators signal that the company is less likely to default on its debt obligations. However, it also means that its shareholder returns will be more modest if things go well. A low safety means fewer troubles in downtimes and less upside in good times. ...read more
Combined financial peformance: Valero Top Financial Performance
| COMBINED PERFORMANCE | July 13, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 81 |
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| GROWTH | ||||||||
| GROWTH | 37 |
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| SAFETY | ||||||||
| SAFETY | 88 |
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| COMBINED | ||||||||
| COMBINED | 92 |
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ANALYSIS: With an Obermatt Combined Rank of 92 (better than 92% compared with investment alternatives), Valero (Oil & Gas Refining, USA) shares have much better financial characteristics than comparable stocks. Shares of Valero are a good value (attractively priced) with a consolidated Value Rank of 81 (better than 81% of alternatives), are safely financed (Safety Rank of 90, which means low debt burdens), but show below-average growth (Growth Rank of 37). ...read more
RECOMMENDATION: A Combined Rank of 92, is a strong buy recommendation based on Valero's financial characteristics. As the company Valero's key financial metrics exhibit good value (Obermatt Value Rank of 81) but low growth (Obermatt Growth Rank of 37) while being safely financed (Obermatt Safety Rank of 90), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 81% of comparable companies, may also indicate that the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity and the downside is limited due to below-average financing risks. ...read more
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