Valero Energy (NYSE: VLO) and Vertex Energy (NASDAQ:VTNR) are both oils/energy companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, earnings, valuation, institutional ownership, profitability, risk and analyst recommendations.
Volatility & Risk
Valero Energy has a beta of 1.02, suggesting that its stock price is 2% more volatile than the S&P 500. Comparatively, Vertex Energy has a beta of 0.89, suggesting that its stock price is 11% less volatile than the S&P 500.
77.8% of Valero Energy shares are held by institutional investors. Comparatively, 14.4% of Vertex Energy shares are held by institutional investors. 0.5% of Valero Energy shares are held by insiders. Comparatively, 31.0% of Vertex Energy shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
This is a summary of recent recommendations and price targets for Valero Energy and Vertex Energy, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Valero Energy currently has a consensus price target of $105.25, indicating a potential downside of 11.35%. Vertex Energy has a consensus price target of $1.00, indicating a potential upside of 1.49%. Given Vertex Energy’s higher possible upside, analysts plainly believe Vertex Energy is more favorable than Valero Energy.
Earnings & Valuation
This table compares Valero Energy and Vertex Energy’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Valero Energy||$93.98 billion||0.54||$4.07 billion||$4.96||23.94|
|Vertex Energy||$145.50 million||0.23||-$8.43 million||($0.36)||-2.74|
Valero Energy has higher revenue and earnings than Vertex Energy. Vertex Energy is trading at a lower price-to-earnings ratio than Valero Energy, indicating that it is currently the more affordable of the two stocks.
Valero Energy pays an annual dividend of $3.20 per share and has a dividend yield of 2.7%. Vertex Energy does not pay a dividend. Valero Energy pays out 64.5% of its earnings in the form of a dividend. Valero Energy has increased its dividend for 7 consecutive years.
This table compares Valero Energy and Vertex Energy’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Valero Energy beats Vertex Energy on 13 of the 16 factors compared between the two stocks.
About Valero Energy
Valero Energy Corporation operates as an independent petroleum refining and ethanol producing company. It operates through three segments: Refining, Ethanol, and VLP (Valero Energy Partners LP). The company is involved in oil and gas refining, marketing, and bulk selling activities. It produces conventional and premium gasolines, gasoline meeting the specifications of the California Air Resources Board (CARB), diesel fuels, low-sulfur and ultra-low-sulfur diesel fuels, CARB diesel, other distillates, jet fuels, asphalts, petrochemicals, lubricants, and other refined petroleum products. As of December 31, 2017, the company owned 15 petroleum refineries with a combined throughput capacity of approximately 3.1 million barrels per day. It markets its refined products through wholesale rack and bulk markets; and through approximately 7,400 outlets under the Valero, Diamond Shamrock, Shamrock, Ultramar, Beacon, and Texaco brand names. The company also produces and sells ethanol, distiller grains, and corn oil primarily to refiners and gasoline blenders, as well as to animal feed customers. It owns and operates 11 ethanol plants with a combined ethanol production capacity of approximately 1.45 billion gallons per year. In addition, the company owns, operates, develops, and acquires crude oil, refined petroleum products pipelines, terminals, and other transportation and logistics assets; and provides transportation and terminaling services. Valero Energy Corporation has operations in the United States, Canada, the United Kingdom, Ireland, and internationally. The company was formerly known as Valero Refining and Marketing Company and changed its name to Valero Energy Corporation in August 1997. Valero Energy Corporation was founded in 1955 and is headquartered in San Antonio, Texas.
About Vertex Energy
Vertex Energy, Inc., an environmental services company, provides a range of services designed to aggregate, process, and recycle industrial and commercial waste systems in 15 states, primarily in the Gulf Coast, Midwest, and Mid-Atlantic regions of the United States. The company operates in three divisions: Black Oil, Refining and Marketing, and Recovery. The Black Oil division collects and purchases used motor oil directly from third-party generators; aggregates used motor oil from a network of local and regional collectors; and sells used motor oil to customers for use as a feedstock or replacement fuel for industrial burners. This division also produces and sells a vacuum gas oil product to refineries and marine fuels market; and base oil product to lubricant packagers and distributors. The Refining and Marketing division gathers hydrocarbon streams in the form of petroleum distillates, transmix, and other chemical products that are purchased from pipeline operators, refineries, chemical processing facilities, and third-party providers; and sells end products, such as gasoline blendstock, pygas, and fuel oil cutter stock to oil companies or to petroleum trading and blending companies. The Recovery division generates solutions for the recovery and management of hydrocarbon streams; and provides dismantling, demolition, decommission, and marine salvage services, as well as owns and operates a fleet of trucks and other vehicles used for shipping and handling equipment and scrap materials. Vertex Energy, Inc. is headquartered in Houston, Texas.
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