Chevron vs Valero Energy Which Offers More Value?

Chevron and Valero Energy are two major players in the energy industry, both boasting significant market capitalizations and strong track records of financial performance. Chevron, a multinational corporation, is primarily involved in the exploration and production of oil and natural gas, while Valero Energy is a leading refiner and marketer of transportation fuels. Investors interested in the energy sector may find these stocks appealing due to their stability and potential for growth in a constantly evolving industry.

Chevron or Valero Energy?

When comparing Chevron and Valero Energy, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Chevron and Valero Energy.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Chevron has a dividend yield of 4.24%, while Valero Energy has a dividend yield of 3.31%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Chevron reports a 5-year dividend growth of 6.16% year and a payout ratio of 70.19%. On the other hand, Valero Energy reports a 5-year dividend growth of 4.98% year and a payout ratio of 37.69%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Chevron P/E ratio at 16.61 and Valero Energy's P/E ratio at 11.13. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Chevron P/B ratio is 1.77 while Valero Energy's P/B ratio is 1.63.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Chevron has seen a 5-year revenue growth of 0.25%, while Valero Energy's is 0.49%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Chevron's ROE at 10.47% and Valero Energy's ROE at 14.32%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $153.08 for Chevron and $128.59 for Valero Energy. Over the past year, Chevron's prices ranged from $135.37 to $167.11, with a yearly change of 23.45%. Valero Energy's prices fluctuated between $124.02 and $184.79, with a yearly change of 49.00%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.