Comparing Ngl Energy Partners Lp (NGL) and Valero Energy Corporation (VLO)
Ngl Energy Partners Lp (NYSE: NGL) and Valero Energy Corporation (NYSE:VLO) are both oils/energy companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, earnings, profitability, analyst recommendations, risk, institutional ownership and dividends.
Valuation & Earnings
This table compares Ngl Energy Partners Lp and Valero Energy Corporation’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Ngl Energy Partners Lp||$13.02 billion||0.11||$136.81 million||($2.10)||-5.88|
|Valero Energy Corporation||$75.66 billion||0.48||$2.29 billion||$4.63||17.79|
Valero Energy Corporation has higher revenue and earnings than Ngl Energy Partners Lp. Ngl Energy Partners Lp is trading at a lower price-to-earnings ratio than Valero Energy Corporation, indicating that it is currently the more affordable of the two stocks.
Ngl Energy Partners Lp pays an annual dividend of $1.56 per share and has a dividend yield of 12.6%. Valero Energy Corporation pays an annual dividend of $2.80 per share and has a dividend yield of 3.4%. Ngl Energy Partners Lp pays out -74.3% of its earnings in the form of a dividend. Valero Energy Corporation pays out 60.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Ngl Energy Partners Lp has raised its dividend for 6 consecutive years. Ngl Energy Partners Lp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This is a breakdown of recent ratings and price targets for Ngl Energy Partners Lp and Valero Energy Corporation, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Ngl Energy Partners Lp||0||2||3||0||2.60|
|Valero Energy Corporation||0||10||9||0||2.47|
Ngl Energy Partners Lp currently has a consensus price target of $18.60, suggesting a potential upside of 50.61%. Valero Energy Corporation has a consensus price target of $79.06, suggesting a potential downside of 3.99%. Given Ngl Energy Partners Lp’s stronger consensus rating and higher probable upside, equities analysts plainly believe Ngl Energy Partners Lp is more favorable than Valero Energy Corporation.
Volatility and Risk
Ngl Energy Partners Lp has a beta of 0.67, meaning that its share price is 33% less volatile than the S&P 500. Comparatively, Valero Energy Corporation has a beta of 1.17, meaning that its share price is 17% more volatile than the S&P 500.
Institutional and Insider Ownership
65.1% of Ngl Energy Partners Lp shares are held by institutional investors. Comparatively, 81.8% of Valero Energy Corporation shares are held by institutional investors. 0.5% of Valero Energy Corporation shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
This table compares Ngl Energy Partners Lp and Valero Energy Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Ngl Energy Partners Lp||-1.40%||-4.60%||-1.45%|
|Valero Energy Corporation||2.33%||9.87%||4.43%|
Valero Energy Corporation beats Ngl Energy Partners Lp on 11 of the 16 factors compared between the two stocks.
Ngl Energy Partners Lp Company Profile
NGL Energy Partners LP owns and operates a vertically integrated energy business. The Company’s segments are crude oil logistics, water solutions, liquids, retail propane, refined products and renewables, and corporate and other. Its crude oil logistics segment includes owned and leased crude oil storage terminals, and owned and leased pipeline injection stations. Its water solutions segment provides services for the treatment and disposal of wastewater generated from crude oil and natural gas production, and for the disposal of solids, such as tank bottoms and drilling fluids. Its liquids segment supplies natural gas liquids to retailers, wholesalers, refiners and petrochemical plants throughout the United States and in Canada. Its retail propane segment consists of the retail marketing, and sale and distribution of propane and distillates, among others. The Company’s refined products and renewables segment is engaged in gasoline, diesel, ethanol and biodiesel marketing operations.
Valero Energy Corporation Company Profile
Valero Energy Corporation (Valero) is an independent petroleum refiner and ethanol producer. The Company’s segments include refining, ethanol and Valero Energy Partners LP (VLP). The refining segment includes its refining operations and the associated marketing activities. The ethanol segment includes its ethanol operations and the associated marketing activities, and logistics assets that support its ethanol operations. The Company owns logistics assets (crude oil pipelines, refined petroleum product pipelines, terminals, tanks, marine docks, truck rack bays and other assets) that support its refining operations. Some of these assets are owned by VLP, which is a midstream master limited partnership owned by the Company. VLP’s assets include crude oil and refined petroleum products pipeline and terminal systems in the United States Gulf Coast and the United States Mid-Continent regions. Its refineries produce conventional gasolines, premium gasolines and lubricants, among others.
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