Valero - VLO

[Rasec]

Hey guys, 

What's your take on VLO?

P/E of ~7, very little debt, very small payout ratio (under 30%) and a great yield in the ~4.7% range. 28 years of payments and a solid dividend growth.

And yet, it's hitting another consecutive 52 week low... and yes I know they missed revenue numbers for Q1 . 


I look at the fundamentals and I feel I should buy some more but there's something I'm missing. Why am I the guy driving in the opposite lane and wondering why everyone else is wrong?

[EricL]

The refiners are cyclical, have always been that way. VLO's annual EPS growth over the last decade is just 0.2%, although its 22.6% over the last 5 and we may be nearing the end of the bull run for refiner's profits.

If you have the stomach to ride out the ups and downs you may do okay, just know what you are buying.

VLO is a price taker, not a price maker with its products.

[Dividendsrule]

I think a more diversified play in a similar sector would be LYB. Plastics and refinery.

[lucas03]

I saw this article today so I thought I would post a link http://dailytradealert.com/2016/06/16/wa...gy-stocks/

[Rasec]

Thanks lucas03, that was a good read.