NEW YORK (TheStreet) -- Shares of Valero Energy (VLO - Get Report) are down by 8.65% to $65.02 on Wednesday afternoon, as the decline in oil prices drives 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.
Oil prices moved lower following the latest U.S. inventory data from the Energy Information Administration, the Wall Street Journal reports. Supplies of crude oil and refined products grew by 10 million barrels for the week ended January 8, bringing the total to a record 1.3 billion barrels.
Crude oil (WTI) is up by 0.20% to $30.50 per barrel and Brent crude is slipping by 2.11% to $30.21 per barrel, according to the CNBC.com index. Earlier today both WTI and Brent crude were trading in the green by more than 3%.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate VALERO ENERGY CORP as a Buy with a ratings score of A-. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. 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 weak operating cash flow.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Powered by its strong earnings growth of 39.50% and other important driving factors, this stock has surged by 52.37% 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 has improved earnings per share by 39.5% 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 ($8.76 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 30.0% when compared to the same quarter one year prior, rising from $1,059.00 million to $1,377.00 million.
- The current debt-to-equity ratio, 0.35, 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 1.21, which illustrates the ability to avoid short-term cash problems.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, VALERO ENERGY CORP's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
- You can view the full analysis from the report here: VLO