Boston, MA 04/21/2014 (wallstreetpr) – The increase in demand for more oil production has resulted in Valero Energy Corporation (NYSE:VLO) to increase its value by more than 200% in the last five years. In the process, Valero has repurchased four million of it shares and has simultaneously increased its dividend by 11% as of January 2014. The company offers an ideal mix of growth and income stock.
It is the difference between the prices of WTI and Brent crude oil that has been mainly responsible for Valero’s phenomenal rise. However, market analysts are of the view that the prices of the two products would soon converge and the advantage gained as of now will soon diminish. The management at Valero is still confident of outperforming its rivals and provide additional value to its stakeholders.
Valero Energy Corporation (NYSE:VLO) incurred expenses of around $1.25 billion which were termed as growth investments in 2013. This amount, however, is estimated to increase to $1.52 billion in 2014, according to recent company reports. In 2013, 46% of the growth investment was designed to improve their logistics while 7% was allocated to the processing of light crude, with the remainder going to hydro cracking, natural gas, petrochemicals and other functions. In 2015, the company has plans to allot 45% to logistics and 27% to processing light crude.
The increase in spending on processing light crude would involve the acquisition of specialized equipment that would permit the crude to be broken down into other components that would require further processing in order that these products could be exported legally.
Valero Energy Corporation (NYSE:VLO) and Enbridge Inc (NYSE:ENB) have recently been granted a license for 12 months from the US Commerce Department to re-export a limited amount of crude oil which was initially imported from Canada. In addition, this license also permits VLO to export its products to the UK.
The Company recently announced that its CEO Bill Kleese would be stepping down on the first of May and would be succeeded by its president and COO Joe Gorder.
