Is VLO a high-quality business?

AlphaMadera's AlphaQuality grade scores Valero Energy Corporation on six pillars — profitability, capital efficiency, balance-sheet strength, growth durability, cash generation, and shareholder yield. The composite letter grade reflects how VLO compares to a Buffett-style quality bar.

What is Valero Energy Corporation's AlphaQuality grade?

AlphaQuality assigns a letter grade (A through F) to VLO based on a six-pillar quantitative model. The live page shows the composite grade plus each pillar's individual score with the underlying metrics.

What makes VLO a quality stock?

AlphaQuality looks at return on capital, free-cash-flow margins, debt-to-equity, revenue stability, dividend and buyback policy, and operating-margin trend. Stocks scoring well across all six pillars earn higher grades — the methodology favors compounders over cyclicals.

VLO - Valero Energy Corporation

Price: -- -- | CONSENSUS: Buy DETAILS | PRICE TARGET: $214.67 DETAILS

AlphaQuality

Quantitative six-pillar business-quality grade

Oil & Gas E&P

AlphaQuality — archetype-weighted quantitative grade

B- 67.5 / 100 composite

Composite Grade

Composite of six pillars weighted for oil & gas e&p businesses. Purely quantitative — no stock price or analyst input.

Profitability

Weight: 15%

B 69.4

5yr Avg ROIC 15.9% 82/100
Operating Margin Trend -0.27 pp/yr 39/100

Capital Efficiency

Weight: 10%

A+ 97.2

5yr Avg ROE 22.3% 96/100
5yr Share-Count CAGR -6.7% 100/100

Growth Quality

Weight: 5%

C+ 59.0

5yr Revenue CAGR 1.9% 35/100
5yr EPS CAGR 35.1% 100/100
Revenue-Growth Years (5) 2/5 40/100

Cash Generation

Weight: 25%

B- 62.2

5yr FCF Margin 4.8% 49/100
5yr FCF/NI Conversion 2.12x 78/100

Balance Sheet

Weight: 25%

A- 84.0

Net Debt / EBITDA 1.04x 84/100
Interest Coverage (EBIT/Int) 6.40x 71/100
Altman Z-Score 4.89 99/100

Stability

Weight: 20%

D+ 39.9

EPS Volatility (σ/μ) 0.82 7/100
Piotroski F-Score 8 89/100
Negative-Revenue Years (5) 3/5 40/100

4 of 5 gurus held; 2 added; 2 trimmed; 1 full exit.

Holders: 4 -1
Avg Δ position: -7.9%
New buys: 0
Full exits: 1

Laffont sold -100%
Cooperman decreased -81%
Dalio increased +55%

How this is calculated

AlphaQuality grades six pillars from 0-100 and weights each by archetype:

Profitability (15%) — 5yr Avg ROIC, Operating Margin Trend
Capital Efficiency (10%) — 5yr Avg ROE, 5yr Share-Count CAGR
Growth Quality (5%) — 5yr Revenue CAGR, 5yr EPS CAGR, Revenue-Growth Years (5)
Cash Generation (25%) — 5yr FCF Margin, 5yr FCF/NI Conversion
Balance Sheet (25%) — Net Debt / EBITDA, Interest Coverage (EBIT/Int), Altman Z-Score
Stability (20%) — EPS Volatility (σ/μ), Piotroski F-Score, Negative-Revenue Years (5)

We deliberately ignore stock price, analyst targets, and consensus ratings so the grade is suitable for backtesting forward returns. A minimum of 5 fiscal years of audited statements is required; distressed and highly leveraged infrastructure businesses are declared ungradable rather than forced into a numeric score.