1. Valero Energy Corporation (NYSE:VLO)
Number of Hedge fund holders: 45
Valero Energy Corporation (NYSE:VLO) specializes in petroleum-based and low-carbon transportation fuels. The company operates across three major segments: refining, renewable diesel, and ethanol, producing a wide range of products such as gasoline, jet fuels, and residual field oils. These products are distributed both in bulk and through branded outlets.
Along with traditional energy products, the company produces renewable diesel under the Diamond Green diesel brand and is also actively involved in the supply of ethanol and corn oil to animal feed customers.
Valero Energy Corporation (NYSE:VLO) reported a strong financial performance in Q2 2024, with a net income of $880 million and an adjusted EPS of $2.71 per share. The refinery segment was the primary income driver, generating $1.2 billion in operating income during the quarter. Although ths was a decrease from $1.7 billion in the first quarter of 2024, the sales volume remained robust, averaging 3 million barrels per day.
Valero’s CEO and President, Lane Riggs, stated:
“The company is seeking strength in the U.S wholesale system with sales exceeding 1 million barrels per day in the second quarter of 2024.”
The renewable diesel segment reported $105 million in operating income in the second quarter of 2024, down from $190 million in the first quarter of 2024. This decrease was primarily due to lower sales volume resulting from planned maintenance activities.
The ethanol segment also generated $105 million in operating income, with production volumes averaging 4.5 million gallons per day. Despite a decline in operating income across all three segments, the total net cash provided by these segments reached $1.6 billion.
Valero made capital investments totaling $420 million for maintenance and compliance purposes. In addition to enhancing operations efficiency, the company rewarded shareholders as it announced by announcing a dividend of $1.07 per share.
Valero is the world’s second-largest producer of corn ethanol, operating 12 plants, which solidifies its position as a key player in the global corn ethanol market. According to Fortune Business Insights, the global corn ethanol market is expected to grow at a CAGR of 5.6% through 2030. Valero’s strong financial performance and significant hedge fund holdings, 11 analysts predict an upside potential of 21.63% in the company’s share price.
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