Valero Energy Partners (NYSE: VLP) and Rose Rock Midstream (NYSE:RRMS) are both oils/energy companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, analyst recommendations, earnings, valuation, profitability, dividends and institutional ownership.

Analyst Recommendations

This is a breakdown of recent recommendations for Valero Energy Partners and Rose Rock Midstream, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Valero Energy Partners 0 1 6 0 2.86
Rose Rock Midstream 0 0 0 0 N/A

Valero Energy Partners currently has a consensus price target of $53.43, suggesting a potential upside of 20.47%. Given Valero Energy Partners’ higher possible upside, equities analysts clearly believe Valero Energy Partners is more favorable than Rose Rock Midstream.

Volatility and Risk

Valero Energy Partners has a beta of 0.74, indicating that its share price is 26% less volatile than the S&P 500. Comparatively, Rose Rock Midstream has a beta of 2.21, indicating that its share price is 121% more volatile than the S&P 500.

Valuation & Earnings

This table compares Valero Energy Partners and Rose Rock Midstream’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Valero Energy Partners $412.55 million 7.33 $298.24 million $2.95 15.03
Rose Rock Midstream N/A N/A N/A N/A N/A

Valero Energy Partners has higher revenue and earnings than Rose Rock Midstream.

Profitability

This table compares Valero Energy Partners and Rose Rock Midstream’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Valero Energy Partners 55.29% 266.53% 22.74%
Rose Rock Midstream 5.87% 8.49% 3.12%

Institutional and Insider Ownership

29.9% of Valero Energy Partners shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

Valero Energy Partners pays an annual dividend of $1.82 per share and has a dividend yield of 4.1%. Rose Rock Midstream does not pay a dividend. Valero Energy Partners pays out 61.7% of its earnings in the form of a dividend. Valero Energy Partners has increased its dividend for 2 consecutive years and Rose Rock Midstream has increased its dividend for 5 consecutive years.

Summary

Valero Energy Partners beats Rose Rock Midstream on 8 of the 11 factors compared between the two stocks.

Valero Energy Partners Company Profile

Valero Energy Partners LP owns, operates, develops and acquires crude oil and refined petroleum products pipelines, terminals, and other transportation and logistics assets. The Company’s assets include crude oil and refined petroleum products pipelines, terminals, and other logistics assets in the United States Gulf Coast and the United States Mid-Continent regions that are integral to the operations of the ten of Valero Energy Corporation (Valero) refineries. It provides assets and services, such as Port Arthur logistics system, McKee logistics system, Memphis logistics system, Three Rivers logistics system, Ardmore logistics system, Houston logistics system, St. Charles logistics system, Corpus Christi logistics system and Meraux logistics system. Port Arthur logistics system includes its Lucas crude system and its Port Arthur products system. McKee logistics system is a crude oil and refined petroleum products pipeline and terminal system supporting Valero’s McKee Refinery.

Rose Rock Midstream Company Profile

Rose Rock Midstream, L.P. owns, operates, develops and acquires diversified portfolio of midstream energy assets. The Company is engaged in providing midstream energy related services, such as crude oil gathering, transportation, storage, distribution and marketing in Colorado, Kansas, Minnesota, Montana, North Dakota, Ohio, Oklahoma, Pennsylvania, Texas and Wyoming. Its segments include Transportation, Facilities, and Supply and Logistics. Its Transportation segment operates crude oil pipelines and truck transportation businesses in the United States. Its Facilities segment operates crude oil storage and terminal businesses in the United States. Its Supply and Logistics segment operates a crude oil marketing and blending business in the United States. The Company operates in the Bakken Shale in North Dakota and Montana, the Denver-Julesburg Basin (DJ Basin) and the Niobrara Shale in the Rocky Mountain region, and the Granite Wash and Mississippi Lime Play in the Mid-Continent region.

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