February 14, 2026 a 07:46 am
VLO: Dividend Analysis - Valero Energy Corporation
Valero Energy Corporation offers investors a stable and attractive dividend yield within the energy sector. With a dividend history spanning 41 years without any cuts or suspensions, this indicates a strong commitment to returning capital to shareholders. However, investors should consider the moderate dividend growth rate when assessing long-term return prospects.
📊 Overview
Valero Energy Corporation is categorized within the energy sector, known for its robust cash generation capacity. The company's current dividend yield stands at 2.36%, supported by a per-share dividend of $4.52. Over four decades of dividend payments reflect the company's operational resilience and dedication to shareholders' returns.
| Category | Data |
|---|---|
| Sector | Energy |
| Dividend Yield | 2.36% |
| Current Dividend Per Share | $4.52 |
| Dividend History | 41 years |
| Last Cut or Suspension | None |
📈 Dividend History
The company's history of consistent dividend payments strengthens confidence in stockholders. Reliable dividend streams are crucial, especially for income-focused investors who prioritize steady payouts.
| Year | Dividend per Share |
|---|---|
| 2026 | $1.20 |
| 2025 | $4.52 |
| 2024 | $4.28 |
| 2023 | $4.08 |
| 2022 | $3.92 |
📈 Dividend Growth
Monitoring dividend growth allows investors to assess a company's potential for increasing shareholder value over time. Valero's growth rates in the past three and five years showcase a consistent uptick, although at moderate levels.
| Time | Growth |
|---|---|
| 3 years | 4.86% |
| 5 years | 2.89% |
The average dividend growth is 2.89% over 5 years. This shows moderate but steady dividend growth.
⚠️ Payout Ratio
The payout ratio is a critical measure, reflecting the proportion of earnings or cash flow paid out as dividends. It indicates whether the company can sustain its dividend policy.
| Key figure | Ratio |
|---|---|
| EPS-based | 58.33% |
| Free cash flow-based | 32.21% |
An EPS payout ratio of 58.33% and an FCF payout ratio of 32.21% suggest an adequately covered dividend, aligning positively with the company's earnings and cash flow generation.
🗣️ Cashflow & Capital Efficiency
Understanding cash flow dynamics and capital efficiency is essential to gauge a company's operational effectiveness and ability to finance dividends from internal resources.
| 2023 | 2024 | 2025 |
|---|---|---|
| Free Cash Flow Yield: 18.13% | 14.63% | - |
| Earnings Yield: 19.25% | 7.02% | 4.67% |
| CAPEX to Operating Cash Flow: 9.87% | 13.57% | - |
| Stock-based Compensation to Revenue: - | 0.08% | - |
| Free Cash Flow / Operating Cash Flow Ratio: 90.13% | 86.43% | - |
The data denotes sound cash flow stability and efficient capital deployment, crucial for supporting dividend payments and strategic growth initiatives.
💼 Balance Sheet & Leverage Analysis
The balance sheet's strength and leverage ratios highlight the firm's financial health and its ability to manage debt responsibly while maintaining liquidity.
| 2023 | 2024 | 2025 |
|---|---|---|
| Debt-to-Equity: 47.97% | 47.08% | 44.76% |
| Debt-to-Assets: 22.35% | 19.19% | 22.35% |
| Debt-to-Capital: 32.42% | 32.01% | 30.92% |
| Net Debt to EBITDA: 0.49 | 0.98 | 0.88 |
| Current Ratio: 1.56 | 1.53 | 3.37 |
| Quick Ratio: 1.11 | 1.03 | 2.83 |
| Financial Leverage: 239.34% | 245.36% | 200.23% |
The company exhibits robust financial stability, indicated by manageable debt-to-equity levels and solid coverage ratios.
🛠️ Fundamental Strength & Profitability
Assessing a company's fundamental support and profitability metrics is key to understanding its capacity for sustainable dividend payments and long-term profitability trajectory.
| 2023 | 2024 | 2025 |
|---|---|---|
| Return on Equity: 33.53% | 11.30% | 9.90% |
| Return on Assets: 14.01% | 4.61% | 4.94% |
| Margins (Net, EBIT, EBITDA, Gross): 6.10%, 8.26%, 10.13%, 8.90% |
2.13%, 3.28%, 5.41%, 3.66% | 1.91%, 2.90%, 5.48%, 4.38% |
| R&D to Revenue: 0% | 0% | 0% |
Favorable profitability indicators and consistent returns on key metrics solidify Valero's position in generating value for shareholders.
📉 Price Development
✅ Dividend Scoring System
| Criteria | Score (1-5) | Score Bar |
|---|---|---|
| Dividend Yield | 3 | |
| Dividend Stability | 5 | |
| Dividend Growth | 2 | |
| Payout Ratio | 4 | |
| Financial Stability | 4 | |
| Dividend Continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 4 |
Total Score: 31/40
📝 Rating
Valero Energy Corporation maintains a commendable position with stable dividend payouts and strong financial health. The company’s commitment to shareholders is evident through its extensive dividend history and supportive financial structure. Investors should consider the moderate dividend growth rate as they align their long-term investment strategies.