Yahoo Finance 1Q16 Pre-Earnings Release: Valero’s Stock Performance
1Q16 Pre-Earnings Analysis of Oil Refiner Valero Energy Corp.
Valero’s stock performance
Continuing its December 2015 downtrend, Valero Energy Corporation’s (VLO) stock had a weak opening to 2016. Since mid-February 2016, VLO’s stock rose by around 11% amid industry volatility. During this period, refining cracks started strengthening. Plus, refining margin indicators of major refining companies showed improvements.
During the same period, HollyFrontier (HFC) and Western Refining (WNR) rose by 18% and 8%, respectively. Delek US Holdings (DK) gained by 19%.
If you are looking for exposure to high-dividend stocks, you can consider the Vanguard High Dividend Yield ETF (VYM). This ETF has ~10% exposure to energy sector stocks.
1Q16 pre-earnings release: VLO’s capex position
Valero Energy (VLO) incurred capital expenditure (or capex) of $2.4 billion in 2015. VLO completed its crude unit expansion at the McKee refinery in 2015. This has increased its gasoline and diesel production from the lower-cost crude in the region. Valero also completed a hydrocracker expansion at its Port Arthur, Texas, refinery.
Valero (VLO) expects to start up its 160 Mbpd (thousand barrels per day) of combined crude topping capacity at its Corpus Christi and Houston, Texas, refineries. The Corpus Christi unit has already been commissioned in December 2015 and the Houston unit is expected to start in 2Q16.
In 2016, Valero expects its capex to be around $2.6 billion, ~$1.0 billion of which is allocated to growth projects. The capital expenditure is aimed at increasing feedstock flexibility, yielding higher value products, sustaining growth, and improving logistics capabilities.
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