Valero vs Targa Resources

This page compares Valero Energy Corp. and Targa Resources Corp., examining their business models, financial performance, and market context in a neutral, accessible way. Educational content, not financial advice.

This page compares Valero Energy Corp. and Targa Resources Corp., examining their business models, financial performance, and market context in a neutral, accessible way. Educational content, not fina...

Comparison Snapshot

Key Financial Metrics

VLO

Metric

TRGP

$55.90B

Market Cap

$41.33B

2.31%

Potential Profit

7.19%

Buy

Analyst Rating

Buy

Why It's Moving

Valero boosts dividend amid soft crude prices and sustainable fuel push, signaling strong cash flow confidence.

Dividend increase from $1.13 to $1.20 per share reflects steady cash flows, with payment set for March 9 to shareholders of record February 5.
Secured Venezuelan crude cargo under U.S. deal, providing cheaper feedstock to boost Gulf Coast refinery margins amid WTI prices below $60.
Ongoing investments in SAF production and FCC optimizations, plus planned Benicia refinery idling, sharpen focus on high-margin assets.

Sentiment:

🐃Bullish

Targa Resources Seals $1.25B Midstream Deal, Signals Dividend Boost Amid Expansion Push.

Closed $1.25B Stakeholder Midstream acquisition effective January 1, enhancing Targa's critical midstream network for growing cleaner fuel demand.
Board approved $1.00/share Q4 dividend payable February 13 to holders of record January 30, with plans to raise it to $1.25/share quarterly starting Q1.
President Jennifer Kneale net acquired shares in January via zero-cost transactions, disposing some at $185.35 after boosting holdings to over 264K shares.

Sentiment:

🐃Bullish

Valero boosts dividend amid soft crude prices and sustainable fuel push, signaling strong cash flow confidence.

Dividend increase from $1.13 to $1.20 per share reflects steady cash flows, with payment set for March 9 to shareholders of record February 5.
Secured Venezuelan crude cargo under U.S. deal, providing cheaper feedstock to boost Gulf Coast refinery margins amid WTI prices below $60.
Ongoing investments in SAF production and FCC optimizations, plus planned Benicia refinery idling, sharpen focus on high-margin assets.

Sentiment:

🐃Bullish

Targa Resources Seals $1.25B Midstream Deal, Signals Dividend Boost Amid Expansion Push.

Closed $1.25B Stakeholder Midstream acquisition effective January 1, enhancing Targa's critical midstream network for growing cleaner fuel demand.
Board approved $1.00/share Q4 dividend payable February 13 to holders of record January 30, with plans to raise it to $1.25/share quarterly starting Q1.
President Jennifer Kneale net acquired shares in January via zero-cost transactions, disposing some at $185.35 after boosting holdings to over 264K shares.

Sentiment:

🐃Bullish

Investment Analysis

Valero

VLO

Pros

Valero Energy has a diverse business model with three segments: refining, renewable diesel, and ethanol, providing multiple revenue streams.
The company reported a strong third-quarter 2025 earnings beat and generated significant free cash flow, returning $1.3 billion to shareholders during that period.
Valero maintains a solid market position with a $51.65 billion market capitalization and a stable dividend yield of approximately 2.67%.

Considerations

Valero’s stock price is forecasted by some analysts to decline by around 11% to approximately $150 by the end of 2025, reflecting near-term pricing pressure.
The company’s valuation scores modestly on some metrics, scoring 2 out of 6 on valuation checks, indicating potential concerns about overvaluation.
Energy market cyclicality and volatility in refining margins and oil prices create execution and earnings risks, especially during supply chain disruptions.

Targa Resources

TRGP

Pros

Targa Resources is a sizable energy infrastructure company with a market capitalization around $36.55 billion, signaling a strong industry presence.
The company operates in midstream energy, benefiting from stable fee-based revenues and growing demand for natural gas gathering and processing.
Targa has been expanding asset capacity and enhancing operational efficiency, positioning itself to leverage growth in natural gas production.

Considerations

Targa Resources faces regulatory and commodity price exposure risks inherent to the midstream energy sector, which may pressure margins.
The company’s growth is sensitive to natural gas market fluctuations and shifts in energy demand, posing cyclicality risks.
Targa’s stock price performance is less broadly covered by analysts and presents less immediate price target visibility compared to larger integrated energy firms.

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