Tesoro Corporation (TSO), BP (BP), Valero (VLO): The Best Refiner for Growth

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For comparison, the world’s largest independent refiner, Valero Energy Corporation (NYSE:VLO) trades at just 7.2 times forward earnings, however is expected to have shakier earnings growth over the next few years. Earnings are expected to drop this year, rise slightly next year, and be flat through 2015. Not only does Valero Energy Corporation (NYSE:VLO) not expand and grow as aggressively as Tesoro, the company carries much more debt, with about $6.4 billion in long-term obligations and just $1.7 billion in cash.

Conclusion

Not only is Tesoro inexpensive right now, but the company also has a better balance sheet and better growth potential than its peers. Right now the market is pricing in a small chance that the BP plc (ADR) (NYSE:BP) deal won’t be approved, and once the deal gets antitrust approval, you may no longer be able to buy Tesoro at this kind of a discount.

The article The Best Refiner for Growth originally appeared on Fool.com and is written by Matthew Frankel.

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