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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Valvoline Inc. (XNYS:VVV) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
VVV
Name:
VALVOLINE INC. (XNYS:VVV)
Sector:
- 3000.00K
Industry:
Oil & Gas Refining & Marketing
CEO:
Mr. Samuel Mitchell
Total Employees:
9,800
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is -7.99% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF VALVOLINE INC.(VVV) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND OIL & GAS REFINING & MARKETING INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
28.67
One Month Price Target:
$28.88
Six Month Price Target :
$29.96
Likely Price in One Year's Time:
Ticker:
$31.24
Likely Trading Range Today Under (Normal Volatility)
$28.56
Price Upper limit ($) :
$28.83
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$27.05
This week:
$25.05
This month :
$21.42
Other Primary facts
Market Cap:
4.96B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
177.02M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
29.65%
-21.77%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$36.19
$32.72
$21.15
$24.62
Medium risk (<10%) entry points
Buy Call
Sell Call
$31.59
Buy Put:
Sell Put:
$30.85
$25.74
$26.49
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
VVV
Sharpe Ratio:
2.39%
Comparison:
VVV, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is -28.66% lower than the industry
& ratio is 4.85% higher than the market/S&P 500 average
Average Returns/Yield of
VVV
Daily returns:
0.08%
Weekly returns:
0.38%
Monthly returns:
1.51%
Yearly returns:
39.76%
Comparison of returns:
Average annual returns/yield (last 3 years) is -54.42% below industry average
Classification:
VVV, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.43
Statistical test of Returns:
VVV has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.79%
Weekly Volatility:
6.24%
Monthly Volatility:
12.48%
Yearly Volatility:
43.22%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.47%
Volatility in last five trading days has been -83.33% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.65%
Weekly VaR:
-12.64%
Monthly VaR:
-25.29%
How Much Can the price of
VVV
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-21%
Worst case (decline):
-87.59%
This translates to price declining to:
$22.51
This translates to price declining to:
$3.56
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
VVV is a 78.46% riskier investment compared to the market/S&P 500 & is 52.89% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -32.19% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
VVV
Beta in relation to market/S&P 500--1.33
Expected beta in 1 year's time:
0.959
Expected beta in 3 year's time:
1.356
Unlevered (debt free) Beta:
0.133
Beta in relation to Nasdaq (XNAS):
0.743
Beta in relation to all global stocks::
0.774
Beta Comparison & Analysis
Beta of competitors/peers::
1.602
Beta is -16.70% lower than peers
Average Industry Beta:
1.405
Beta is -5.04% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
489.96%
Sustainable growth rate is 261.14% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.058
Alpha is -78.38% below industry average alpha yield
Alpha is 371% higher than market/& is unsustainably high
Analysis of Cost of Capital of
VVV
Equity cost of capital:
0.123
Equity cost of capital is -3.80% below industry mean WACC
Unlevered (without debt) cost of capital:
1.23%
Before-tax cost of debt:
3.60%
After-tax cost of debt:
2.85%
Overall debt rating:
Upper medium A grade (third highest grade),CO8<=0.0429,"Medium BBB grade (Fourth highest grade)
Weighted average cost of capital (WACC):
2.85%
WACC is -36.01% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$19.04
Revenue growth rate per share of (3Y):
30.39
Annual revenue growth rate is 335.94% above the industry average
EPS:
$2.39
Expected Annual growth rate of EPS (3Y):
28.06%
Expected future EPS growth rate is -384.89% lower than the Oil & Gas Refining & Marketing industry
Free cash flow (FCF) per share:
$0.95
Balance sheet equity growth per share: 69.83%
Equity growth rate per share is 778.92% higher than the industry
Debt per share
$10.95
EBITDA per share
$4.10
Valuation Analysis Today of
VVV
P/E Ratio:
11.9
P/E Ratio of Competitors/Peers:
11.88
P/E ratio is 0.21% higher than main peers & is -9.16% lower than the industry
Stock price/value with industry average P/E ratio: $31.32
VVV is -8.45% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $16.17
Present value of the expected future dividends only: $4.50
P/S (Price to Sales ratio):
1.51
Price to sales ratio is -1.75% below the industry mean
P/B (Price to book value ratio):
30.39
Price to free cash flow: 30.33
-
Net income growth rate (3Y):
173.86%
Net income growth rate is -50.67% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 5.31%
Dividend yeild: 1.74%
Previous Dividend: $0.13
Previous adjusted dividend: $0.13
Previous Dividend: $0.50
Expected next dividend best case: $0.13
Expected next dividend worst case: $0.12
Average dividend payment (long-term): $0.12
Average dividend increase/decrease (growth rate) % per period: 1.06%
Expected next dividend payment date: 13/09/2022
Expected next dividend record date: 29/08/2022
Expected next dividend declaration date: 20/07/2022
Previous dividend payment date: 15/06/2022
Previous dividend record date: 31/05/2022
Previous dividend declaration date: 21/04/2022
Dividend History:
2022-05-27--$0.13
2021-11-26--$0.13
2021-05-27--$0.13
2022-02-25--$0.13
2021-08-27--$0.13
2021-02-25--$0.13
Dividend growth rate is -111.02% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
1160.48%
Net debt to equity ratio:
1088.62%
Debt to assets ratio:
60.89%
Net debt to assets ratio:
57.12%
Debt-to-asset ratio is 14.46% above industry average
Ability to repay debt:
Interest coverage ratio:
10.23
Interest coverage ratio is 507.99% more than industry average
Looking forward:
Debt growth rate:
-10.26%
Annual debt growth is -108% lower than industry average debt growth rate
Debt repayment rate in last quarter: 1.57%
Analysis of Key Statistics
Correlation of price movement with the market:
0.6
Statistical significance of correlation:
VVV has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.517
Stock price is 15.99% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.517
Correlation of price movement with Nasdaq (^IXIC):
0.017
Covariance of price movement with the market:
0.028
Kurtosis
28.838
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
1.002
Returns are right (positive) skewed; mean returns are greater than median and mode returns
Fundamental Analysis & Dupont Analysis of
VVV
Gross Profit Margin Ratio:
119%
Operating Profit Margin Ratio:
15.16%
Operating profit margin is -1333.13% lower than the industry
Net Profit Margin Ratio:
119%
Effective Tax Rate:
22.26%
Effective tax rate is 89.72% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
259.28%
Return on equity (ROE) is 130.05% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
13.60%
Return on assets (ROA) is 198.67% higher than the industry
Financial Leverage:
2.6x
Current Ratio:
1.85
Current ratio is -41.82% below industry average
Cash Conversion Cycle (days):
71.6
Cash conversion cycle is 228.86% above industry average
The remaining useful life of property plant & equipment is: 4.6 years
Stock based compensation to net income ratio:
0.69%
In-depth Efficiency Analysis
Revenue generated per employee:
344.0K
Each employee generates -92% less revenue than industry average revenue per employee
EBITDA generated per employee:
74.1K
Each employee generates -74% less EBITDA than industry average revenue per employee
Profit generated per employee:
44.2K
Each employee generates -70% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 0.3K
Each employee generates -98% less free cash flow than industry average revenue per employee
Assets/Capital per employee
222.7K
Each employee generates -98% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
VVV
Cosan SA (XNYS:CSAN)
DCP MIDSTREAM UNT (XNYS:DCP)
NATIONAL FUEL GAS COMPANY (XNYS:NFG)
Sinopec Shanghai Petrochemical Company Limited (XNYS:SHI)
ANTERO RESOURCES CORPORATION (XNYS:AR)
PLAINS ALL AMERICAN PIPELINE UNT (XNAS:PAA)
HF SINCLAIR CORPORATION (XNYS:DINO)
SOUTHWESTERN ENERGY COMPANY (XNYS:SWN)
SHELL MIDSTREAM PARTNERS UNT (XNYS:SHLX)
Current Analyst Ratings
Strong buy�13%
Buy�8%
Hold�25%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
3.37B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
2.37B
999.00M
-
-
546.00M
-
-
546.00M
-
71.00M
98.00M
726.00M
511.00M
433.00M
557.00M
124.00M
433.00M
Statement of Cash Flow
Date:
Period:
25.00M
Differed Income Tax :
8.00M
Stock Based Compensation :
3.00M
Change in Working Capital :
- 90000.00K
Accounts Receivables:
-
Other Working Capital:
- 6000.00K
Other Non-Cash Items:
- 1000.00K
Net Cash Provided by Operating Activities:
32.00M
Investments in PP&E:
- 35000.00K
Net Acquisitions:
- 14000.00K
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
12/31/21
2022
Q1
152.00M
-
152.00M
530.00M
264.00M
55.00M
1.00B
1.13B
-
-
50.00M
13.00M
204.00M
2.18B
-
3.18B
218.00M
32.00M
-
-
291.00M
541.00M
1.94B
503.00M
2.48B
-
3.02B
2.00M
123.00M
9.0M
33.00M
December 31, 2021 at 12:00:00 AM
2.92B
167.00M
3.18B
-
1.97B
1.8B
-
3.00M
- 46000.00K
- 31000.00K
-
- 31000.00K
- 23000.00K
22.00M
- 63000.00K
-
- 77000.00K
154.00M
231.00M
32.00M
- 35000.00K
- 3000.00K
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
VVV
2023
2024
2025
2026
2027
$37.72
$41.10
$44.79
$48.80
$53.18