Analyzing Western Gas Equity Partners (WGP) & Arc Logistics Partners (ARCX)
Western Gas Equity Partners (NYSE: WGP) and Arc Logistics Partners (NYSE:ARCX) are both oils/energy companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, earnings, dividends, analyst recommendations, valuation, risk and profitability.
Insider & Institutional Ownership
18.4% of Western Gas Equity Partners shares are held by institutional investors. Comparatively, 44.4% of Arc Logistics Partners shares are held by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Western Gas Equity Partners pays an annual dividend of $2.15 per share and has a dividend yield of 6.0%. Arc Logistics Partners pays an annual dividend of $1.76 per share and has a dividend yield of 10.7%. Western Gas Equity Partners pays out 130.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Arc Logistics Partners pays out 429.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Western Gas Equity Partners has increased its dividend for 3 consecutive years and Arc Logistics Partners has increased its dividend for 2 consecutive years.
Earnings & Valuation
This table compares Western Gas Equity Partners and Arc Logistics Partners’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Western Gas Equity Partners||$1.80 billion||4.36||$345.77 million||$1.65||21.80|
|Arc Logistics Partners||$105.38 million||3.05||$15.04 million||$0.41||40.05|
Western Gas Equity Partners has higher revenue and earnings than Arc Logistics Partners. Western Gas Equity Partners is trading at a lower price-to-earnings ratio than Arc Logistics Partners, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Western Gas Equity Partners has a beta of 1.5, indicating that its stock price is 50% more volatile than the S&P 500. Comparatively, Arc Logistics Partners has a beta of 0.79, indicating that its stock price is 21% less volatile than the S&P 500.
This table compares Western Gas Equity Partners and Arc Logistics Partners’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Western Gas Equity Partners||16.96%||8.99%||4.69%|
|Arc Logistics Partners||9.14%||3.38%||1.88%|
This is a breakdown of current recommendations for Western Gas Equity Partners and Arc Logistics Partners, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Western Gas Equity Partners||0||2||6||0||2.75|
|Arc Logistics Partners||0||3||0||0||2.00|
Western Gas Equity Partners presently has a consensus price target of $50.50, suggesting a potential upside of 40.39%. Arc Logistics Partners has a consensus price target of $16.50, suggesting a potential upside of 0.49%. Given Western Gas Equity Partners’ stronger consensus rating and higher probable upside, analysts plainly believe Western Gas Equity Partners is more favorable than Arc Logistics Partners.
Western Gas Equity Partners beats Arc Logistics Partners on 13 of the 16 factors compared between the two stocks.
About Western Gas Equity Partners
Western Gas Equity Partners, LP is a limited partnership. The Company is formed to own approximately three types of partnership interests in Western Gas Partners, LP (WES). WES is an master limited partnership (MLP) engaged in the business of gathering, compressing, treating, processing and transporting natural gas, and gathering, stabilizing and transporting condensate, natural gas liquids (NGLs) and crude oil. WES provides these midstream services for Anadarko Petroleum Corporation (Anadarko), as well as for third-party producers and customers. Its assets and investments are located in the Rocky Mountains (Colorado, Utah and Wyoming), North-central Pennsylvania and Texas. The Bison treating facility treats and compresses gas from coal-bed methane wells in the Powder River Basin of Wyoming. MIGC, LLC receives gas from various coal-bed methane gathering systems in the Powder River Basin and the Hilight system, as well as from WBI Energy Transmission, Inc.
About Arc Logistics Partners
Arc Logistics Partners LP owns, operates, develops and acquires a portfolio of energy logistics assets. The Company is engaged in the terminaling, storage, throughput and transloading of crude oil and petroleum products. The Company is focused on growing its business through the optimization, organic development and acquisition of terminaling, storage, rail, pipeline and other energy logistics assets. As of March 6, 2017, the Company’s energy logistics assets were located in the East Coast, Gulf Coast, Midwest, Rocky Mountains and West Coast regions of the United States and supplied a group of third-party customers, including oil companies, independent refiners, crude oil and petroleum product marketers, distributors and various industrial manufacturers. As of December 31, 2016, its assets consisted of 21 terminals in 12 states; four rail transloading facilities, and the liquefied natural gas (LNG) Interest in connection with the LNG Facility.
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