Darling International Inc. (DAR): How to Profit From Inedible Oils and Meats

Final take: this partnership will go places

The economic symbiosis that Valero Energy Corporation (NYSE:VLO) and Darling International Inc. (NYSE:DAR) established in DGD can bring in additional gains for both partners besides the returns from the joint venture itself. The JV diversifies Valero’s fuel source for its customers while Darling International gets an added conduit for the output of its prolific Griffin unit. The renewable diesel it produces can be channeled and distributed through Valero’s existing pipeline system and distribution network because this fuel output has the same specs as petroleum diesel.

As a final thought, initiating a position on Valero Energy Corporation (NYSE:VLO), which has 16 petroleum refineries in the U.S., Canada, the U.K, and Aruba, has sound merits too. Like Darling International Inc. (NYSE:DAR), its latest results beat analysts’ consensus estimate. In its most recent quarter, Valero reported $1.18 EPS, ahead of the $0.98 forecast, and revenue of $33.47 billion, above the $30.41 billion market expectation. Currently trading at just around seven times its earnings, Valero likewise looks a bargain in addition to it having secured a robust pipeline on Darling International’s lucrative renewable energy business.

Arturo Cuevas has no position in any stocks mentioned. The Motley Fool recommends Darling International. The Motley Fool owns shares of Darling International.

The article How to Profit From Inedible Oils and Meats originally appeared on Fool.com.

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