1. Bloomsburg Investment Group
Equity Analysis
Valero Energy Corporation (VLO)
Analysts:
Nico Wolfgang, Class of 2017
Jacob Moser, Sam Izzo, Kris Gross, Chandler Junk, Keegan Carl, Class of 2018
Corporate Details:
Name
Ticker
Domicile
Sector
Industry
Exchange
Last Close
Price 52 Wk High
Price 52 Wk Low
Latest Dividend
Dividend Yield % TTM
Beta 5 Yr (Mo­End)
Avg Daily Volume (3 Mo)
Shares Outstanding (mil)
Number of Analysts
Valero Energy Corp
VLO
United States
Energy
Oil & Gas Refining & Marke�ng
NEW YORK STOCK EXCHANGE, INC.
65.16
73.88
51.68
0.60
2.92
2.02
6,327,459.98
470.39
4
Corporate Summary:
Valero Energy Corpora�on is an independent petroleum refining and
marke�ng corpora�on, opera�ng in the United States, Canada, the
Caribbean, the United Kingdom, and Ireland, in addi�on to expor�ng to
South America and Asia. Valero’s company is split into two main
segments, refining and ethanol. The Refining segment is involved in
refining, wholesale marke�ng, product supply, and distribu�on, and
transporta�on opera�ons. This segment produces conven�onal and
premium gasolines, gasoline mee�ng the specifica�ons of the California
Air Resources Board (CARB), reformulated gasoline blend stock for
oxygenate blending, diesel fuels, low­sulfur and ultra­low­sulfur diesel
fuels, CARB diesel fuel, dis�llates, jet fuels, asphalts, petrochemicals,
lubricants, and other refined products. The Ethanol segment produces
and sells ethanol and dis�llers grains. Valero sell their products
through more than 7,500 outlets. These range from Valero, Diamond
Shamrock, Ultramar, Beacon, and Texaco. Valero Energy Corpora�on
also owns and operates 11 ethanol plants with a combined ethanol
produc�on capacity of approximately 1.3 billion gallons per year. Valero
is widely regarded as the America’s fastest growing gasoline brand.
Bloomsburg Investment Group Opinion:
As a group, we believe Valero is the best op�on to buy in an otherwise una�rac�ve sector. Despite drops in oil prices,
Valero was s�ll able to increase their revenue on their fiscal year. Two of Valero’s biggest compe�tors, Exxon, and
Chevron, have experienced drops in profit. Chevron has experienced lawsuits in recent �mes, and has had to sell off
assets in order to make up for losses. Exxon has experienced nega�ve growth for the past three years, as well
decreased their dividends. Valero is a strong company, and is willing to adapt to the changing �mes in a vola�le market,
in order to maintain profitability. They have also expanded into interna�onal environments, and are the largest gasoline
provider in the United Kingdom. In addi�on, they have begun to lease space on oil tankers for exports to both South
America and Asia, thus opening up another revenue stream. The execu�ves at Valero understand the concerns of
profitability in the energy sector and are laying the necessary groundwork to stay profitable. At this current �me, the
stock is at an extremely low price based on our valua�ons, making it an excellent �me to purchase Valero.
Page 1 of 7US Dollar3/21/2016 Valero Energy Corp
Source: Morningstar Direct

2. Valero Energy Corp
VLO
Financial Summary, Year End 2015 (in millions)
Market Capitaliza�on
Total Revenue
Gross Profit
Opera�ng Income
Net Income Cont Ops
Net Income
Current Assets
Cash
Total Assets
Current Liabili�es
Long­term Liabili�es
Total Liabili�es
Total Equity
Opera�ng Cash Flow
Inves�ng Cash Flow
Financing Cash Flow
Change In Cash
EBITDA
Enterprise Value
Capital Expenditure
P/E Ra�o Forward
PEG Ra�o
Dividend Yield % TTM
30,650.79
87,804.00
13,153.00
6,358.00
4,101.00
3,990.00
14,972.00
4,114.00
44,343.00
7,360.00
16,456.00
23,816.00
20,527.00
5,611.00
­2,487.00
­2,545.00
425.00
8,246.00
33,913.79
­1,618.00
8.36
13.27
2.92
Financial Highlights
August 20-25: 2015 Stock Market Sell off/flash crash, caused by China and Greece
Oct 28 – Nov 5: Large jump from $63.42 to 71.93 as they release Q3 results, with large
growth shown
February 3: Low as oil price plummeted, due to talks between OPEC and Russia
stopping
February 8: Oil price plummets even further, causing all energy stocks to fall
While their income went down, so have expenses, allowing the gross profit and net
income to go up over the prior year. EPS has also increased. Dividends have also
increased significantly, going up from $1.05 to $1.70 per share. Refining, their
strongest segment, was able to increase its revenue while also decreasing expenses to
the prior year. With the decline in oil prices, their operating margin per barrel of oil has
also increased by more than $1 per barrel. One main concern is the decline in ethanol
profits, but it is a much smaller percentage of the actual income for the company.
Investment Growth
Time Period: 3/1/2013 to 2/29/2016
5/2013 8/2013 11/2013 2/2014 5/2014 8/2014 11/2014 2/2015 5/2015 8/2015 11/2015 2/2016
-30.0%
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
Valero Energy Corp 41.9% S&P 500 TR USD 35.8%
Page 2 of 7US Dollar3/21/2016 Valero Energy Corp
Source: Morningstar Direct

3. Valero Energy Corp
VLO
4Q Earnings
Jan. 29��, 2016
Valero’s 4Q15 Earnings came out be�er than Es�mated. Valero’s revenues surpasses es�mates
of Wall Street by 8.7%. Along with the EPS are around $1.8, roughly 22% higher than the
es�mated EPS of $1.5. Valero’s 4Q15 net income came in at $862 million, which is a decrease
by 9%, however it is due to opera�ng income of its refining segment. As far as the yearly
performance revenues were at $87.8 billion, 1% greater than es�mates. In all, the 2015
adjusted EPS were 38% higher than the 2014 adjusted EPS.
Projection from Analysts
March 5��, 2016
Valero Energy Corpora�on has become a Diamond in the Rough. Even
with the declining oil prices, Valero managed to climb from $50 a share
to over $70 a share. Valero’s return on assets and return on equity are
both slightly above industry averages. Also, the Debt­to­equity ra�o of
0.3 is below industry average of 0.5. Valero’s stock is projected to
range from a low of $65 to a high of $100 a share. The room for
improvement is substan�al.
Expansion?
March 14��, 2016
Valero looks to become a poten�al buyer of Sunoco LP. Energy Transfer
Equity LP ETE is contempla�ng the sale of Sunoco LP. At the Start of 2016,
Energy Transfer Equity is considering asset sales as a way to raise cash to
meet monetary obliga�ons. Valero looks to become a poten�al buyer of
Sunoco at a price $2 billion and a 36.4% stake of Sunoco. Sunoco is a
limited partnership that distributes motor fuel to convenience stores,
independent dealers, commercial customers and distributors. Looking
ahead, Valero has the poten�al to buy Sunoco, allowing them to grow as a
company.
WTI Use
March 13��, 2016
Valero’s Low­debt of equity of 35.9% is likely to outperform as Oil
Prices Rebound. Valero is buying West Texas Intermediate oil around
the price of $38.67 a barrel. Compared to Brent crude oil, that is selling
at around $40.50. Valero buys the cheaper of the two, WTI and refines
that oil to a be�er quality. The cheaper WTI becomes in rela�on to
Brent, the more profits Valero makes.
Page 3 of 7US Dollar3/21/2016 Valero Energy Corp
Source: Morningstar Direct

4. Valero Energy Corp
VLO
Investment Growth
Time Period: 3/1/2011 to 2/29/2016
8/2011 2/2012 8/2012 2/2013 8/2013 2/2014 8/2014 2/2015 8/2015 2/2016
-50.0%
-25.0%
0.0%
25.0%
50.0%
75.0%
100.0%
125.0%
150.0%
175.0%
200.0%
Valero Energy Corp 138.8% Chevron Corp -3.6% Exxon Mobil Corporation 8.0%
Competitor Comparison
Revenue
(mil)
Revenue %
Chg
Gross
Profit
(mil)
Gross
Margin %
Net
Income
(mil)
Net
Income %
Chg
Net
Margin %
Market
Cap
(mil)
(Daily)
Current
Ratio
Receivable
Turnover
Valero Energy Corp
Chevron Corp
Exxon Mobil Corporation
138,477.00 -34.67 45,692.00 33.00 4,587.00 -76.16 3.31 183,965.54 1.34 9.24
268,882.00 -34.73 80,614.00 29.98 16,150.00 -50.34 6.01 349,662.11 0.79 11.23
87,804.00 -32.89 13,153.00 14.98 3,990.00 9.92 4.54 30,650.79 2.03 18.40
Competitor Comparison (Cont.)
Asset
Turnover
ROA %
Total
Debt
to Total
Equity
ROE % Beta 5 Yr
P/E
Ratio
Forward
PEG Ratio
P/B
Ratio
Current
Dividend
Yield %
TTM
Free
Cash
Flow /
Sales %
TTM
Valero Energy Corp
Chevron Corp
Exxon Mobil Corporation
1.95 8.88 0.36 19.37 2.02 8.36 13.27 1.49 2.92 4.55
0.52 1.72 0.25 2.98 1.09 23.15 0.93 1.20 4.38
0.78 4.71 0.23 9.36 0.86 20.83 2.26 2.05 3.47 1.43
Industry Environment:
The energy sector is extremely volatile. Largely dependent of the price of oil, specifically WTI and Brent, the
energy sector is at the hands of OPEC as they ultimately control the production threshold for the world. With
constant fluctuations in oil prices, especially as of late, stock prices are directly affected, so dramatic swings
are common for this sector. As a whole, the energy sector has been lagging down the S&P. However, the low
oil prices, especially with WTI are a good thing for Valero. This is because they purchase WTI to refine and sell
it at a level of Brent crude, which is slightly higher. By investing in Valero, we feel that oil prices are going to
remain relatively down in relation to past prices, which allows Valero’s margins to increase as they are
spending less on oil.
Page 4 of 7US Dollar3/21/2016 Valero Energy Corp
Source: Morningstar Direct

5. Valero Energy Corp
VLO
Strengths:
Dividends: Annually, dividends have been increasing rapidly. On
a five­year comparison of previous years, the Dividends per
common share have risen from $.30 in 2011 to $1.70 in 2015.
Currently it is si�ng at 4.02% payout and is expected to
increase, with an expected dividend of $2.40 for the year,
assuming no increase or decrease in the most recent payout.
Refining oil: Embraced and adopted the idea of trying to
become more than just a gas­sta�on company that offers
Gasoline and Diesel. Valero is striving to maximize the most out
of our limited fossil fuels. Refining oil has allowed Valero to
produce Jet Fuel, Renewables, Asphalt, Propane, Sulfur,
Naphthenic Oils, Solvents, Aroma�cs, Natural Gas Liquids, and
Petroleum Coke. The Renewables consist of recycling animal fat,
used cooking oil and corn oil to produce diesel fuel. With a wide
range of products, Valero has tremendous capabili�es of
become a driving force in the fossil fuel industry. On top of this,
they were able to tremendously improve their margins on
refining, something that is expected to con�nue with lower oil
prices.
Weaknesses:
Vola�lity: Being in the oil industry, Valero is suscep�ble to
fluctua�ng prices. This affects a variety of areas for them from
the price of their oil contracts to the price that they can charge
at the pump. However, they are more than capable of dealing
with lower oil prices, and we as a group believe that they are
going to be more greatly affected if oil prices rise significantly
over the next year.
Decreasing Oil Prices: As oil prices have gone down, the margin
for profit has also gone down. As seller of gasoline at sta�ons
around the US and UK, the lower price means that they have to
sell more in order to make a profit. Being heavily dependent on
volume is risky as OPEC can greatly increase or decrease supply
in a ma�er of moments.
It is key to keep in mind that both of these weaknesses are
present for ALL companies that are in the energy sector and are
not exclusive to Valero.
Opportunities:
With oil being so low this is a good chance for Valero to
stockpile oil on favorable futures contracts. Also The Diamond
Pipeline will provide the Valero Memphis Refinery with price­
advantaged domes�c sweet crude oil from Cushing, Okla., which
will enhance the refinery’s long­term viability for the produc�on
of gasoline, diesel and jet fuel for the greater Memphis and
eastern Arkansas area and provide economic benefits to the
areas along the route. Another opportunity is that they are
expanding into expor�ng ethanol to Asia and Brazil. The low
stock price is allowing them to have an opportunity to buy back
$1.3 billion of common stock back, showing that they are going
to invest more in themselves during the �me of low oil prices.
Threats:
The price of oil is very vola�le which may lead some people to
ques�on inves�ng in the energy sector. With Valero being in
the refining as well as ethanol segments the risk that is
associated with being in the energy sector is minimized. Also
there are many big names in the energy sector to compete
against, with that being said Valero is the best pick because of
their ability to make money in an unstable market. Since they
deal outside of the US, they are subject to foreign exchange rate
risks, but do hedge them by using an Economic Hedge, using
foreign exchange and currency contracts to lock in on USD
amounts. For example, in the first quarter of 2016 already, they
have had a $10 million gain.
Page 5 of 7US Dollar3/21/2016 Valero Energy Corp
Source: Morningstar Direct

6. Valero Energy Corp
VLO
Valuation: Discount Cash Flow Model (DCF)
We got a DCF value of $211.16. This is a number that is not very accurate, but it is due to the
volatile cash flow of changing revenues and free cash flow, due to the volatility of oil and cash
flows, specifically WTI.
Valuation: Discount Dividend Model (DDM)
We got a DDM value of $68.81 which is fairly accurate, based on the current price that is in the
$60's. Valero has been paying a rapidly increasing dividend that we expect for the next few years
as a short term play due to a rise in oil prices. In to perpetuity, we expect it to level out at a
modest growth.
Valuation: Multiple Valuation
Our most accurate valuation for Valero was the Multiples valuation. Our group used the Price/
Earnings Multiples Method. We took the projected EPS from CapitalIQ and mutiplied it by the
average growth in dividends that is projected. For 2016, we got an intrinsic value of $75.05, with
projected values of $76.57 in 2017 and $80.97 in 2018.
Page 6 of 7US Dollar3/21/2016 Valero Energy Corp
Source: Morningstar Direct

7. Valero Energy Corp
VLO
Sources Cited
www.Finance.yahoo.com
www.CapitalIQ.com
www.Nasdaq.com
www.The Street.com
www.cnbc.com
www.valero.com
www.eia.gov
Bloomsburg Investment Group Disclaimer
This report was developed by student members of the Bloomsburg Investment Group (BIG). The purpose of the
report is to provide research analysis of securities to potential and existing donors of The BIG Fund. The report is
designed to exemplify the abilities of our members through investment research and analysis. Analysts of the
Bloomsburg Investment Group and The BIG Fund are not registered brokers, investment advisors, or licensed
financial professionals. The generated opinion of our analysts is not an offer or solicitation to buy or sell any
security, and due diligence is recommended before making any financial transaction. Information included in this
report was compiled from different public sources. Not all relevant data was included into the report, and accuracy
is not guaranteed. Students, faculty, and staff of Bloomsburg University may have a financial interest in any
company listed in this report.
Disclaimer: Our group has projected that the oil price for the next year, both Crude and WTI will range between $25 and
$52.50 a barrel. We project this based on eia.gov's 2 year projections for both Crude and WTI, which have them bottoming out
near $35 and peaking around $50. Due to unrest with OPEC and production, our group feels that oil prices may dip to near $25
if overproduction becomes extreme, which also means that our projections won't have a significant jump over current prices
unless an extreme event occurs.
Page 7 of 7US Dollar3/21/2016 Valero Energy Corp
Source: Morningstar Direct