$VLO Valero Energy Corporation has been rising in price steadily since June 2012. Valero is up 41% in 2012. Valero unveiled plans to potentially break off its retail business from the rest of the company, the latest in a chain of energy companies slimming down assets to sharpen their focus.
Valero is working with Credit Suisse Securities to review several options for spinning off its nearly 1,000 retail stations and expects a split could be completed in six months.(See what $COP did with $PSX)
Valero reported second-quarter earnings of $831 million, or $1.50 a share, up from $744 million, or $1.30 a share, a year earlier. Revenue increased 11% to $34.66 billion. Analysts surveyed by Thomson Reuters recently expected earnings of $1.43 a share on revenue of $32.62 billion.
Valero said refining margins increased as fuel sales ticked upward throughout the U.S., offsetting rising prices for some crude oil types sold in the Gulf Coast region. Valero's refining operating income rose 8.9% as throughput volumes increased 15%. The extra barrels offset a decline in profit margin per barrel, which shrank to $10.63 from $11.41.
Valero's board recently approved a 17% dividend increase. In the past year, Valero has increased its dividend by 250%, moving toward the company's pledge to start returning cash to shareholders. Valero pays a $0.70 dividend for a current dividend yield of 2.37%.
$VLO has clear upside from here in my opinion.
