Valero Energy Corp (VLO) stock analysis
Valero Energy Corp (VLO) clears 7 of this site's 8 mechanical value filters, 6 of 8 Buffett-style checks and 3 of 5 Lynch-style checks. At $426.28 it trades 27.2% below this site's neutral DCF value (a margin of safety of +27.2%). Its earnings quality rates Strong and it returns +3.1% to shareholders net of dilution. Figures are as of October 23, 2026, from SEC filings and market data refreshed weekly; this is educational analysis, not investment advice.
Data as of October 23, 2026. Refreshed weekly from SEC filings and market data.
What does Valero do?
Valero is a large US oil refiner, turning crude oil into gasoline, diesel and jet fuel. It also makes ethanol and renewable diesel.
Brands and businesses it owns
- Valero
- Diamond Green Diesel (joint venture)
- Beacon
What stands out about Valero?
- The share price implies 0.2% yearly growth. At $426.28, VLO's free cash flow of $34.31 per share would have to grow 0.2% a year, fading to 2.5% by year 10, for this site's DCF (10% discount rate) to match the price. This site's baseline starts at 8%, so the price asks for less growth than the baseline. Change the assumptions.
- Misses 1 of the 8 value filters. It fails vs 200-day MA (±12%) (+52.7%); the other 7 pass. See every filter.
- The margin of safety is falling. It went from +31% on Oct 7 to +27% on Oct 23 across 5 weekly readings. See the trend.
- Strongest against peers: return on equity. At 30% (peer median 16%) it ranks 4th of 21 among energy stocks this site tracks. See the ranking.
- Weakest against peers: net margin. At 5.2% (peer median 13.5%) it ranks 19th of 21 among energy stocks this site tracks. See the ranking.
How has Valero's share price moved?
The interactive price chart needs JavaScript.
Is Valero undervalued? The value diligence check
Every value-investing signal this site computes for this stock, gathered in one place: the same real numbers from the tools below, not a new score.
- Margin of safety (DCF) +27.2%
- P/E vs. its own history 17.4x · the middle Real range: 4.4x–32.9x over 5 years (net income per diluted share from each fiscal year's 10-K, paired with the real closing price at that fiscal year-end).
- Wall St. analyst rating Buy · 3.56/5 25 analysts this month: 3 strong buy, 10 buy, 11 hold, 0 sell, 1 strong sell (Finnhub). Down from 3.62 last month.
- Altman Z″-Score (bankruptcy risk) 4.82 · Safe zone
- Earnings quality (is the profit real?) Strong · all 5 checks clean Beneish M-score −2.91 · accruals −5.9% of assets · 156% of profit arrived as cash · stock comp 0.1% of revenue · share count −6.4% a year. From the latest 10-K (year to Dec 2025) - see the Earnings Quality Screener for how each check is scored.
- Shareholder yield (cash back to owners) +3.1% net Latest fiscal year (2025): dividends 1.1% + buybacks 2.1% − stock comp 0.1%, as a share of today's market cap. Over 14 years its split-adjusted share count fell 46%. See Shareholder Yield Leaders.
- Capital needed to grow (See's test) $1.57 per $1 of new profit · FlightSafety-like · but only 18% return on capital Operating profit $3.9B → $6.3B, capital needed $31B → $35B, 2016–2025 (3-year averages); return on capital now 18% before tax. Buffett's See's Candies needed $0.42 per $1 of new profit, FlightSafety $3.20, a typical grower about $5. Cyclical: the answer depends on where in its cycle the window starts and ends. See Capital-Light Compounders.
- PEG (growth at a reasonable price) 1.35 · Above fair P/E 17.4× ÷ 12.9% a year of growth behind it. 143rd lowest of 447 stocks with a usable PEG. Lynch's fair value is a PEG of 1; a very high PEG usually means almost no growth, a very low one a profit spike. See PEG Ratio Ranking.
- Compounder lenses (4) 3 of 4 · misses capital-light Capital-light growth: not cleared (profit grew 1.6×, under 2×); Profit is real: cleared; Cash to owners: cleared; Fair price (PEG): cleared. See Compounders at a Fair Price, which also lets you move the PEG bar.
- Value trap check Clear
- Munger's Inversion Check 0 flags
- Standing vs. sector peers 3 of 7 measures above the median Compared with the 20 other energy stocks this site tracks: 2 in the top third, 2 in the bottom third.
- Dividend payout sustainability 0/6 · clean
How does Valero compare with its peers?
3 of 7 measures sit above the median of the 20 other energy stocks tracked here, 2 in the top third and 2 in the bottom third.
- P/E ratiolower is cheaper · peer median 17.2× 17.4× –12th of 21
- Free-cash-flow yieldhigher is cheaper · peer median 6.5% 8.0% ✓7th of 21
- Return on equityhigher is better · peer median 16% 30% ✓4th of 21
- Net marginhigher is better · peer median 13.5% 5.2% ✕19th of 21
- Revenue growthhigher is better, year on year · peer median 11.2% 12.6% –9th of 21
- Debt / equitylower is safer · peer median 0.45 0.45 –11th of 21
- Dividend yieldamong dividend payers · peer median 2.10% 1.12% ✕19th of 21
Peers are the stocks this site tracks in the same sector group, not every listed competitor. The bar runs from the weakest peer (left) to the strongest (right); the tick is the middle. Measures that don't apply to a sector (cash-flow yield for banks, debt for financials) are left out.
What would Buffett & Lynch say?
Buffett's checklist is built around durable, profitable businesses bought at sensible prices, and VLO doesn't clear enough of it yet. In its favor: VLO is currently earning a strong return on shareholders' equity, and has kept that profitability up over five years, not just this year, carries a conservative amount of debt relative to equity, earns many times its interest expense, so debt service isn't a worry, is trading below what a conservative discounted-cash-flow estimate says it's worth - his own "price is what you pay, value is what you get" test, not a fixed multiple ceiling, and trades at a reasonable multiple of owner earnings, his own term for the real cash a business could pay out. Where it comes up short: VLO runs thinner pretax margins than he'd like to see, and hasn't grown earnings per share fast enough over five years to impress him.
- ROE (TTM) > 11% ✓
- ROE (5yr avg) > 11% ✓
- Debt/Equity < 0.5 ✓
- Pretax margin > 15% ✕
- EPS growth (5yr) > 7% ✕
- Interest coverage > 5x ✓
- Trading below intrinsic value (DCF) ✓
- Price vs. owner earnings < 25x ✓
- Bonus: returning capital via buybacks FY2025
Lynch looked for growth stories that weren't overpriced for that growth, and VLO falls short of his bar. In its favor: VLO isn't leaning on debt to fund that growth, isn't asking too much even by a fast grower's usual richer multiple, and is generating real cash to back up a fast grower's higher price tag. Where it comes up short: VLO doesn't clear the tighter PEG bar a fast grower needs to justify its pace, and is growing earnings outside the 20-50% band he considered sustainable for a fast grower - either not fast enough to earn the label, or a pace he'd flag as unlikely to hold up.
- PEG < 1 (stricter for fast growers) ✕
- EPS growth 20%-50% ✕
- Debt/Equity < 0.5 ✓
- P/E < 40 ✓
- Price/FCF < 40 ✓
Quantitative approximations of each investor's documented approach, not endorsed by either investor or their estates - commentary, not this site's actual ranking criteria. Buffett never published a numeric checklist: only 2 of his 8 checks here trace to his own documented concepts ("owner earnings," from his 1986 shareholder letter, and "price is what you pay, value is what you get," his case against fixed P/E/P/B ceilings) - the other 6 (ROE, debt, margins, growth, interest coverage) use commonly-cited thresholds that are not numbers he himself published. The 8 hard filters below (plus the Munger check and Graham margin of safety) are this site's real, mechanical screen and are computed completely independently of the checklists above.
Berkshire Hathaway's own filing
Which of the 8 value filters does Valero pass?
- Market Cap > $25B $125.8B
- Trailing P/E < 25 17.44
- PEG Ratio < 1.5 1.35
- Price/Book < 8 5.03
- Price/Sales < 7 0.90
- EPS Growth YoY > -5% +452.9%
- vs 50-day MA (±12%) +9.1%
- vs 200-day MA (±12%) +52.7%
What is Valero's margin of safety?
+31% on 2026-10-07 → +27% on 2026-10-23 (5 weekly readings).
Where is Valero in its 52-week range?
What is the short interest in Valero?
8,999,474 shares short as of 2026-09-30 (FINRA settlement date). Reported twice a month, so this only changes roughly every two weeks, not daily.
What could go wrong with Valero? Munger's inversion check
"Invert, always invert." Instead of reasons to buy, these are reasons to hesitate, not a verdict, and not everything worth knowing about a business.
- Margin of safety, even in the bull case +57%
- Short interest under 5% of float 3.1%
- Passes most of the 6 fundamental filters 6/6 passed
- Price run-up backed by value, not just momentum +170% off 52wk low
- Debt/equity stable since 2016 0.40 → 0.45
Doesn't cover circle of competence, management quality, or accounting concerns: those need judgment, not data.
How much have Valero shareholders gained per year?
Not enough clean earnings history to compute this for VLO yet - a loss year in the window breaks the growth math rather than faking a number through it.
An earnings-based proxy, not a stock-price total return - it doesn't capture multiple expansion/contraction or reinvested dividends. EPS from VLO's own 10-K filings; dividend yield is the current trailing yield on today's price, from the same weekly fetch as the rest of this site.
What do Valero's 10-year financials show?
From VLO's own 10-K filings (SEC EDGAR): up to the last 10 fiscal years. Press any year's bars for the exact figures.
Frequently asked questions about Valero
What kind of company is Valero?
Valero is a large US oil refiner, turning crude oil into gasoline, diesel and jet fuel. It also makes ethanol and renewable diesel. Brands and businesses it owns include Valero, Diamond Green Diesel (joint venture) and Beacon. This site groups it with Energy stocks.
Is Valero trading above or below its DCF value?
At $426.28, VLO trades 27.2% below this site's neutral DCF value of $585.80 per share, a margin of safety of +27.2%. That DCF projects free cash flow for 10 years, with growth starting at 8% and fading to 2.5%, discounted at 10%; it is one set of assumptions, not a forecast. Test your own in the Intrinsic Value Calculator.
How many of this site's 8 value filters does Valero pass?
VLO passes 7 of 8. It passes Market Cap > $25B ($125.8B), Trailing P/E < 25 (17.44), PEG Ratio < 1.5 (1.35), Price/Book < 8 (5.03), Price/Sales < 7 (0.90), EPS Growth YoY > -5% (+452.9%) and vs 50-day MA (±12%) (+9.1%). It misses vs 200-day MA (±12%) (+52.7%). The 8-filter list shows every stock that passes all of them.
What growth is Valero's share price pricing in?
At $426.28, VLO's free cash flow of $34.31 per share would have to grow 0.2% a year, fading to 2.5% by year 10, for this site's DCF (10% discount rate) to match the price. This site's baseline starts at 8%, so the price asks for less growth than the baseline. Change the assumptions.
Does Valero pass the Buffett-style and Lynch-style checklists?
On this site's Buffett-style checklist VLO clears 6 of 8 checks and leans no; it misses Pretax margin > 15% and EPS growth (5yr) > 7%. On the Lynch-style checklist it clears 3 of 5 and leans no, with Fast Grower as its Lynch category; it misses PEG < 1 (stricter for fast growers) and EPS growth 20%-50%. These are this site's own rules written in the style of each investor, not their personal views; the rules are in the Editorial Standards.
How much cash does Valero return to shareholders?
VLO's net shareholder yield is +3.1%: the cash it returns through dividends and buybacks, minus stock-based compensation, as a share of its market value. Latest fiscal year (2025): dividends 1.1% + buybacks 2.1% − stock comp 0.1%, as a share of today's market cap. Over 14 years its split-adjusted share count fell 46%. Its trailing dividend yield is 1.12%, paid out of 14% of its free cash flow; the dividend-sustainability check raises 0 of 6 flags. See Shareholder Yield Leaders and the Sustainable Dividend Screener.
Where do these numbers come from?
- Financial statements: Valero's 10-K annual report for the year ended Dec 31, 2025, filed Feb 25, 2026 (filing index). Every earlier year in the 10-year financials comes from the company's older 10-K filings, all listed on SEC EDGAR.
- Prices and market data: quotes, P/E and analyst ratings from Finnhub; daily price history and the 52-week range from Twelve Data, both refreshed weekly. Short interest comes from FINRA, reported twice a month.
- How to check a figure: click any number in the card above to see its exact source, and read the Editorial Standards for every rule behind the checks.
About this Valero Energy Corp analysis
This page shows every value-investing check the site runs on Valero Energy Corp (VLO) in one place: the 8 mechanical filters, the Buffett and Lynch checklists, a margin of safety from a disclosed DCF, earnings quality, shareholder yield and how it ranks against its sector peers. The numbers come from SEC filings and public market data, refreshed weekly, and the same rules apply to every stock on the stock list. See Editorial Standards for the sources and the rules, or run your own filters in the stock screener.