An Energy Stock Raising Its Dividend?

Think it's all bad in the energy sector? It seems every oil-related stock is dropping like a rock. Dividends are being cut and the price of oil just keeps falling. To buy an oil stock now would be like trying to catch the proverbial falling knife.

However, Valero Energy Corp (VLO) yesterday announced a 20% increase in their dividend. The company named for the mission San Antonio de Valero (the original name of the Alamo), is the world's largest independent oil refiner. It doesn't drill for oil, it produces gasoline. It makes money no matter what the price of oil is.

Valero's revenue has fallen off. The most recent quarter was down 34% year-over-year. But earnings over the past seven quarters have increased 32%, 27%, 251%, 3%, 21%, 118%, and 40% respectively. That's an Earnings-Per-Share growth rate of 36%. The Return On Equity (ROE) is 17% and the P/E is down to 7. The stock has a Relative Strength of 93, meaning it is outperforming 93% of the stocks in the S&P 500. The number of funds holding VLO has increased from 1856 to 2014 over the past year.

While most of the rest of the market has been dropping, Valero stock has been working upwards within an up-trending channel.

The stock has fallen to the bottom of the channel, coinciding with the 200-day moving average, and the stochastics indicator is dropping to the oversold area and may soon produce another ‘buy' signal (these have worked out pretty well in the past year).

Consider VLO's seasonal tendencies. For the next 14 weeks, VLO has averaged a 16.8% gain, and had a gain in 21 out of the past 22 years. Most of those were double-digit gains.

Let's take a closer look at their dividend. Valero's dividend currently equals a 3.7% yield. They have increased their dividend for five years in a row, and the dividend growth rate over that time averaged 56%. The dividend, at $0.05 per share per quarter back in 2011, is now up to $0.60 a share per quarter.

Valero is due to announce their Q4 2015 earnings on January 28th, before the open. Anyone considering re-entering the energy sector might want to watch for their earnings release and see how the market reacts. VLO, especially with dividend reinvestment, could turn out to be a good long-term investment. Of course, any investment in the energy sector carries higher risk right now. So a prudent trader or investor, considering adding a position in VLO, would consider only a small position to start, adding to it as the market improves and the stock logs regular gains and holds them.

Of course, there's much more you need to know and many more stocks you can capitalize upon each and every day.  To find out more, please click on the following link: www.markettamer.com/seasonal

By Gregg Harris, MarketTamer Chief Technical Strategist

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Gregg Harris is the Chief Technical Strategist at MarketTamer.com.

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MarketTamer is not an investment advisor and is not registered with the U.S. Securities and Exchange Commission or the Financial Industry Regulatory Authority. Further, owners, employees, agents or representatives of MarketTamer are not acting as investment advisors and might not be registered with the U.S. Securities and Exchange Commission or the Financial Industry Regulatory.


This company makes no representations or warranties concerning the products, practices or procedures of any company or entity mentioned or recommended in this email, and makes no representations or warranties concerning said company or entity’s compliance with applicable laws and regulations, including, but not limited to, regulations promulgated by the SEC or the CFTC. The sender of this email may receive a portion of the proceeds from the sale of any products or services offered by a company or entity mentioned or recommended in this email. The recipient of this email assumes responsibility for conducting its own due diligence on the aforementioned company or entity and assumes full responsibility, and releases the sender from liability, for any purchase or order made from any company or entity mentioned or recommended in this email.


The content on any of MarketTamer websites, products or communication is for educational purposes only. Nothing in its products, services, or communications shall be construed as a solicitation and/or recommendation to buy or sell a security. Trading stocks, options and other securities involves risk. The risk of loss in trading securities can be substantial. The risk involved with trading stocks, options and other securities is not suitable for all investors. Prior to buying or selling an option, an investor must evaluate his/her own personal financial situation and consider all relevant risk factors. See: Characteristics and Risks of Standardized Options. The www.MarketTamer.com educational training program and software services are provided to improve financial understanding.


The information presented in this site is not intended to be used as the sole basis of any investment decisions, nor should it be construed as advice designed to meet the investment needs of any particular investor. Nothing in our research constitutes legal, accounting or tax advice or individually tailored investment advice. Our research is prepared for general circulation and has been prepared without regard to the individual financial circumstances and objectives of persons who receive or obtain access to it. Our research is based on sources that we believe to be reliable. However, we do not make any representation or warranty, expressed or implied, as to the accuracy of our research, the completeness, or correctness or make any guarantee or other promise as to any results that may be obtained from using our research. To the maximum extent permitted by law, neither we, any of our affiliates, nor any other person, shall have any liability whatsoever to any person for any loss or expense, whether direct, indirect, consequential, incidental or otherwise, arising from or relating in any way to any use of or reliance on our research or the information contained therein. Some discussions contain forward looking statements which are based on current expectations and differences can be expected. All of our research, including the estimates, opinions and information contained therein, reflects our judgment as of the publication or other dissemination date of the research and is subject to change without notice. Further, we expressly disclaim any responsibility to update such research. Investing involves substantial risk. Past performance is not a guarantee of future results, and a loss of original capital may occur. No one receiving or accessing our research should make any investment decision without first consulting his or her own personal financial advisor and conducting his or her own research and due diligence, including carefully reviewing any applicable prospectuses, press releases, reports and other public filings of the issuer of any securities being considered. None of the information presented should be construed as an offer to sell or buy any particular security. As always, use your best judgment when investing.