Should I Buy Valero Energy (VLO)? Finance YouTuber Analysis

The YouTuber suggests Valero is undervalued, with a fair value of $230 per share compared to its current price of $150, based on discounted cash flow. This assessment is supported by its price-to-earnings multiple being at the lower end of its historical range and Enterprise Value to EBITDA also indicating undervaluation based on 5 and 10-year averages. The company also offers a reliable 3% dividend yield.

“using kind of free cash flow which for me many times is my favorite valuation method well we could see that the fair value is at about 230 per share while the stocks trading slightly over 150 per share so Valero looks like an interesting one”

Valero Energy is recommended as a buy for its 29% earnings yield and 3.6% dividend yield. As the world's largest refiner and second largest in renewable diesel and ethanol, it's a pure play on refinery operations. The company consistently returns cash to shareholders through dividends and share repurchases, which increases the earnings yield by reducing the share count.

“Valero is one of the strongest on our list with a 29 earnings yield along with its solid 3.6 dividend yield while you hold the shares”

The YouTuber highlights Valero Energy as having the highest earnings yield on the list, being the world's largest refiner and second-largest in renewable diesel and ethanol production. Valero consistently returns cash to shareholders through dividends and share repurchases, which reduces share count and boosts earnings per share. It offers a 29% earnings yield and a 3.6% dividend yield.

“Valero has consistently returned cash to shareholders with 1.6 billion in dividends and 4.6 billion dollars in share repurchases just last year reducing that share count through those other purchases means that earnings are shared across fewer investors increasing that earnings yield tops our list with a 29 earnings yield along with its solid 3.6 dividend yield while you hold the shares”