Phillips 66 (PSX), Valero Energy Corporation (VLO), Devon Energy Corp (DVN): Look for Gains With These Oil Refiners

Page 1 of 2

When it comes to investing in the energy sector, you probably know the usual suspects.  Companies like Chevron Corporation (NYSE:CVX) and Exxon Mobil Corporation (NYSE:XOM) dominate the space and carry huge market capitalizations in the hundreds of billions of dollars.  Stocks such as these are Dow Jones 30 components, and some of America’s best known and most closely followed companies.  They pump out big profits and are known for rock-solid balance sheets and reliable dividend increases.  However, you may not be as familiar with oil refinery stocks, which carry many of the same qualities as the big boys of the energy sector.  Stocks in the refinery industry have strong operations with solid dividends, along with more room for their stocks to run due to smaller market values than their mega-cap brethren.

Valero Energy Corporation (NYSE:VLO)Three names to consider

Phillips 66 (NYSE:PSX) is an interesting name both because it carries the largest market capitalization of the refiners and only recently began trading as an independent entity.  Formerly owned by ConocoPhillips, Phillips 66 (NYSE:PSX) was spun off last year.  At the time, management felt that each part of the company would be worth more than the sum of the parts, and they’ve been proven right.  Phillips 66 (NYSE:PSX) stock has soared since the spin-off, advancing more than 80% since the split.

Phillips 66 (NYSE:PSX) reported full-year 2012 adjusted earnings of $8.46 per share, compared with adjusted earnings per share of $5.66 a year ago.  Its impressive operating performance means that despite its huge share price acceleration, the stock still isn’t expensive on a trailing earnings basis.  The stock currently trades for less than 8 times its 2012 adjusted earnings per share.  In addition, the company has raised its dividend twice already, and yields 2% at recent prices.

Valero Energy (NYSE:VLO) is a close competitor of Phillips 66 (NYSE:PSX), with a slightly smaller market value of approximately $25 billion.  Like Phillips 66, Valero Energy Corporation (NYSE:VLO) also reported spectacular fiscal 2012 fourth-quarter and annual results.  Full-year 2012 net income attributable to Valero Energy Corporation (NYSE:VLO) Energy Corporation (NYSE:VLO) stockholders was $2.1 billion, or $3.75 per share. Included in the results were non-cash asset impairment losses of $983 million after taxes, or $1.77 per share.  Stripping away all one-time events, adjusted earnings per share came in at $5.59 for the full-year.

Valero Energy Corporation (NYSE:VLO) attributed its success to higher refining margins as well as lower refining expenses.  This combination led to the spike in Valero’s profitability.  Going forward, the company intends to utilize cash from operations effectively for shareholders through a number of initiatives.  First, management intends to keep buying back stock to increase earnings per share. For the full-year 2012, Valero used $281 million to purchase 10.6 million shares of the company’s stock.

Page 1 of 2

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The Most Wanted Drug Lords

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Best Travel Destinations in Australia

World’s Most Expensive Musical Instruments

World’s Most Famous Animals

Most Expensive Cakes in the World

Most Expensive Kosher Champagne in the World

Most Expensive Kosher Wine in the World

The Most Surprisingly Dark Fairy Tales

Most Popular Travel Destinations in Asia

The 10 Most Expensive Dresses Ever Worn to the Oscars

World’s Most Visited Art Museums

Best Countries for Photographers to Work in

Best Paid Jobs in the Film Industry

The Most Renowned Recovered Paintings Ever

Child Stars That Turned out Just Fine

Books That Were Banned in the Past Century

World’s Richest Dancers

Best Remedies against Bad Breath

Foods That Improve Your Skin Texture

Best-Selling Children’s Books of all Time

Foods That Boost Your Libido

Best-Selling Books of all Time

The Most Expensive Academy Awards Jewelry in History

Most Expensive Japanese Restaurant In New York City

The Best B-Boy Movies

Most Awesome Hip Hop Documentaries

Foods That Stain Your Teeth

Richest Doctors in the World

The Best Movie Sountracks Ever

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!