Valero Energy scores 89 for management and 34 for moat. The management score rests on a return on invested capital of 7.1% and a gross margin of 4.4% — figures that describe a business turning capital into profit efficiently. Debt sits at 0.49x equity. A narrow moat alongside exceptional management is a combination worth understanding before the price matters at all.
Three independent anchors set the price worth paying. Growth is modelled at 13.6% a year, below the 14.0% actually measured over the last decade — the model caps growth rather than extrapolating a good run forwards. The exit multiple assumed is 27.2x. That produces an intrinsic value of $578.14, a 10-CAP price of $352.26 and a payback time price of $521.31, with the value zone set at the highest of the three, $521.31. Today's price of $408.46 sits inside that zone.
The price sits inside the value zone, but the business scores 34 for moat and 89 for management. Cheap and good are different tests, and only one of them is passed here.
| Price | $408.46 |
| Market cap | $117.6B |
| P/E ratio | 16.9x |
| Return on invested capital | 7.1% |
| Gross margin | 4.4% |
| Debt to equity | 0.49x |
| Free cash flow yield | 10.0% |
| Growth rate used | 13.6% |
| Growth rate measured | 14.0% |
| Exit multiple assumed | 27.2x |
| Company | Moat | Buy price |
| Marathon Petroleum (MPC) | 49 | $725.07 |
| Phillips 66 (PSX) | 49 | $280.47 |
| Enbridge Inc (ENB) | 48 | $20.27 |
| Canadian Natural Resources (CNQ) | 66 | $61.90 |
Every number above is built on assumptions that can be changed. In Moatly you can move the growth rate, the exit multiple and the margin of safety and watch every figure recalculate, so you are testing your own view of Valero Energy rather than accepting ours.