NEW YORK (TheStreet) -- Shares of Valero Energy (VLO - Get Report) are slipping by 2.87% to $61.92 in early afternoon trading on Monday, as lower oil prices drag some energy and related stocks into the red today.
Valero Energy is a San Antonio, TX-based international manufacturer and marketer of transportation fuels, other petrochemical products and power.
The price of the commodity is down today due to concerns regarding China's economic growth and the progress of the Iranian nuclear deal.
Crude oil (WTI) is lower by 2.54% to $46.06 per barrel this afternoon and Brent crude is slipping by 3.01% to $48.94 per barrel, according to the CNBC.com index.
Official data released on Monday showed that economic growth in China, the world's biggest energy consumer, was at its slowest pace in six years in the third quarter, Reuters reports.
Additionally, the nuclear negotiator in Iran is optimistic that the deal regarding the country's nuclear program could be implemented before the end of this year, Reuters added.
Iran will increase production by 500,000 barrels a day within a week after the sanctions are lifted, a senior official from the country told Reuters.
Separately, TheStreet Ratings team rates VALERO ENERGY CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
We rate VALERO ENERGY CORP (VLO) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel its strengths outweigh the fact that the company shows low profit margins.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Powered by its strong earnings growth of 118.03% and other important driving factors, this stock has surged by 44.74% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, VLO should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- VALERO ENERGY CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, VALERO ENERGY CORP increased its bottom line by earning $6.98 versus $4.97 in the prior year. This year, the market expects an improvement in earnings ($8.55 versus $6.98).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 129.8% when compared to the same quarter one year prior, rising from $588.00 million to $1,351.00 million.
- The current debt-to-equity ratio, 0.34, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.17, which illustrates the ability to avoid short-term cash problems.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, VALERO ENERGY CORP's return on equity exceeds that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: VLO