Valero dividend: cash coverage and yield
Valero's current quarterly dividend is $1.20; the forecast base dividend rises from $5.04 per share to $5.28 and then $5.52. In 2025, Valero generated $3,941 million of free cash flow versus $4,003 million of shareholder payments, so cash generation did not cover total shareholder distributions.
How much does Valero pay per share over the years shown?
Valero later raised its quarterly dividend to $1.20 and authorized another $5 billion of repurchases. Authorization permits spending; it does not show when shares will be bought or whether the price will prove attractive. The clearest success is the combination of lower debt and a smaller share count, but the test remains whether distributions are covered by recurring cash after necessary investment.
The base dividend rises from $5.04 per share to $5.28 and then $5.52. The bear holds the current rate first, then cuts to $4.00 and $3.20. The bull reaches $5.28, $5.76 and $6.24. The base reflects the gradual dividend record and the January 2026 increase from $1.13 to $1.20.
| 2025 | 2024 | 2023 | 2022 | 2021 | |
|---|---|---|---|---|---|
| − Dividends paid, per share | 4.55 | 4.30 | 4.11 | 3.94 | 3.94 |
| − Share buybacks, per share | 8.41 | 8.93 | 14.55 | 11.56 | 0.07 |
| = FCF not paid out, per share | 0.57 | 1.59 | 9.10 | 4.35 | |
| = Paid out more than FCF, per share | 1.39 |
What this means. The company's own free cash flow per share differs because it uses different rules, including leaving out some spending by consolidated businesses and treating joint-venture and working-capital changes differently.
Is Valero's dividend covered by its cash?
That distinction mattered in 2025. Valero reported $3,941 million of free cash flow, while shareholder payments reached $4,003 million. It also paid $369 million to minority owners. The company could cover the gap with existing cash or borrowing, but distributions above free cash flow cannot continue indefinitely without weakening the balance sheet or reducing future payouts.
| 2025 | 2024 | 2023 | 2022 | 2021 | |
|---|---|---|---|---|---|
| Free cash flow | 3,941 | 4,626 | 7,313 | 9,837 | 3,401 |
| − Dividends paid | 1,405 | 1,384 | 1,452 | 1,562 | 1,602 |
| − Share buybacks | 2,598 | 2,875 | 5,136 | 4,577 | 27 |
| = Free cash flow not paid out | 185 | 561 | 3,605 | 1,770 | |
| = Paid out more than the free cash flow | 431 | ||||
| Paid out, % of free cash flow | 101.6% | 92.1% | 90.1% | 62.4% | 47.9% |
What this means. In 2025, the company paid shareholders more cash than it generated, so it used savings or new borrowing to cover the difference.
What could change Valero's dividend?
The October 22, 2026 results report is the first dated test of whether the June rebound reflects durable margins. Port Arthur’s damaged hydrotreater—a refinery unit that uses hydrogen to remove impurities from fuel—is expected back by year-end 2026. Repair cost, insurance recovery and restored output will show the incident’s lasting effect. St. Charles was scheduled to begin operating on July 30, 2026. Supply, demand, sustaining spending and buybacks through 2027–2029 will determine whether margins and cash support the base case.
From 2027 through 2029, returning supply or weaker demand would lower margins and the multiple. Continued tight markets, successful projects and evidence that Valero uses its repurchase authorization would support the bull path. The stated payout policy remains a framework, not a promise of dividend growth or full buyback execution.
| October 2027 | October 2028 | October 2029 | |
|---|---|---|---|
| Normal operating profit | 8,000 (4,500 / 10,000) | 7,500 (4,000 / 10,500) | 7,323 (4,500 / 10,000) |
| Dividends per share | 5.04 (4.80 / 5.28) | 5.28 (4.00 / 5.76) | 5.52 (3.20 / 6.24) |
| Enterprise value to normal operating profit | 9.00 (7.00 / 11.00) | 9.00 (7.00 / 12.00) | 9.00 (8.00 / 11.00) |
| Net debt | 880 (1,592 / 1,362) | -1,284 (-137 / -1,057) | -3,275 (-2,495 / -3,001) |