Price to Operating Profit (P/OP)
since 2005
Calculation
Valero Energy Corp., P/OP, long-term trends, calculation
| P/OP | = | Share price1, 2, 3 | ÷ | Operating profit per share1 | Operating profit per share1 | = | Operating income (loss)1 (in millions) |
÷ | No. shares of common stock outstanding2 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Feb 22, 2024 | 3.92 | = | 139.78 | ÷ | 35.67 | 35.67 | = | 11,858 | ÷ | 332,481,908 | |
| Feb 23, 2023 | 3.13 | = | 132.43 | ÷ | 42.27 | 42.27 | = | 15,690 | ÷ | 371,150,836 | |
| Feb 22, 2022 | 16.50 | = | 85.84 | ÷ | 5.20 | 5.20 | = | 2,130 | ÷ | 409,303,630 | |
| Feb 23, 2021 | — | = | 75.81 | ÷ | -3.86 | -3.86 | = | -1,579 | ÷ | 408,562,891 | |
| Feb 26, 2020 | 7.65 | = | 71.72 | ÷ | 9.37 | 9.37 | = | 3,836 | ÷ | 409,337,126 | |
| Feb 28, 2019 | 7.45 | = | 81.56 | ÷ | 10.95 | 10.95 | = | 4,572 | ÷ | 417,614,487 | |
| Feb 28, 2018 | 10.88 | = | 90.42 | ÷ | 8.31 | 8.31 | = | 3,599 | ÷ | 433,176,258 | |
| Feb 23, 2017 | 8.46 | = | 67.03 | ÷ | 7.92 | 7.92 | = | 3,572 | ÷ | 451,049,519 | |
| Feb 25, 2016 | 4.49 | = | 60.69 | ÷ | 13.52 | 13.52 | = | 6,358 | ÷ | 470,392,665 | |
| Feb 26, 2015 | 5.41 | = | 61.97 | ÷ | 11.46 | 11.46 | = | 5,902 | ÷ | 514,888,348 | |
| Feb 27, 2014 | 6.52 | = | 48.51 | ÷ | 7.44 | 7.44 | = | 3,963 | ÷ | 532,510,263 | |
| Feb 28, 2013 | 6.29 | = | 45.59 | ÷ | 7.25 | 7.25 | = | 4,010 | ÷ | 552,933,285 | |
| Feb 24, 2012 | 3.68 | = | 24.39 | ÷ | 6.63 | 6.63 | = | 3,680 | ÷ | 555,069,442 | |
| Feb 25, 2011 | 8.66 | = | 28.56 | ÷ | 3.30 | 3.30 | = | 1,876 | ÷ | 568,971,156 | |
| Feb 26, 2010 | — | = | 17.52 | ÷ | -0.10 | -0.10 | = | -58 | ÷ | 564,808,668 | |
| Feb 27, 2009 | 17.77 | = | 19.38 | ÷ | 1.09 | 1.09 | = | 563 | ÷ | 516,308,274 | |
| Feb 29, 2008 | 4.46 | = | 57.77 | ÷ | 12.94 | 12.94 | = | 6,918 | ÷ | 534,652,367 | |
| Feb 26, 2007 | 4.45 | = | 59.00 | ÷ | 13.26 | 13.26 | = | 8,010 | ÷ | 604,114,047 | |
| Mar 1, 2006 | 6.26 | = | 54.95 | ÷ | 8.78 | 8.78 | = | 5,459 | ÷ | 621,838,191 |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).
1 US$
2 Data adjusted for splits and stock dividends.
3 Closing price as at the filing date of Valero Energy Corp. Annual Report.
The financial performance and market valuation of Valero Energy Corp. between 2006 and 2024 exhibit significant cyclicality, characterized by extreme fluctuations in operating profitability and corresponding shifts in the Price to Operating Profit (P/OP) ratio.
- Operating Profitability Trends
- Operating profit per share has demonstrated high volatility, ranging from a low of -3.86 USD in 2021 to a peak of 42.27 USD in 2023. Significant contractions occurred in 2010 and 2021, where operating profits turned negative, rendering the P/OP ratio inapplicable for those periods. A period of relative stability was observed between 2012 and 2020, with profits generally oscillating between 6.63 USD and 13.52 USD before the surge in 2023.
- Share Price Evolution
- The share price experienced a notable decline from 2008 (57.77 USD) to a trough in 2010 (17.52 USD). Following this period, a steady recovery trend was established, with the price escalating to 90.42 USD by 2018. A more aggressive growth phase occurred after 2021, leading to a peak of 139.78 USD by February 2024.
- P/OP Ratio Analysis
- The P/OP ratio serves as a primary indicator of market sentiment relative to operational earnings. The ratio spiked to 17.77 in 2009 and 16.50 in 2022, coinciding with periods of severely depressed operating profits. Conversely, the ratio reached its lowest levels in the most recent reporting periods, dropping to 3.13 in 2023 and 3.92 in 2024. This compression suggests that while the share price has reached historic highs, the growth in operating profit has outpaced the increase in market valuation.
- Correlation Between Profit and Valuation
- An inverse relationship is observed between operating profit magnitude and the P/OP ratio. During years of peak operational efficiency, such as 2023, the valuation multiple contracted significantly. During years of operational distress, the multiple expanded or became undefined. This pattern is consistent with a cyclical industry where market pricing often lags behind the rapid fluctuations of operating margins.
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