Critical Contrast: Valero Energy Partners (VLP) versus EQT Midstream Partners, (EQM)
Valero Energy Partners (NYSE: VLP) and EQT Midstream Partners, (NYSE:EQM) are both mid-cap oils/energy companies, but which is the better business? We will contrast the two companies based on the strength of their valuation, risk, dividends, analyst recommendations, profitabiliy, institutional ownership and earnings.
Valero Energy Partners pays an annual dividend of $1.82 per share and has a dividend yield of 4.2%. EQT Midstream Partners, pays an annual dividend of $3.74 per share and has a dividend yield of 5.1%. Valero Energy Partners pays out 61.7% of its earnings in the form of a dividend. EQT Midstream Partners, pays out 72.3% 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. Valero Energy Partners has increased its dividend for 2 consecutive years and EQT Midstream Partners, has increased its dividend for 4 consecutive years. EQT Midstream Partners, is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation and Earnings
This table compares Valero Energy Partners and EQT Midstream Partners,’s top-line 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||7.21||$297.48 million||$2.95||14.78|
|EQT Midstream Partners,||$774.18 million||7.63||$623.10 million||$5.17||14.18|
EQT Midstream Partners, has higher revenue and earnings than Valero Energy Partners. EQT Midstream Partners, is trading at a lower price-to-earnings ratio than Valero Energy Partners, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of recent ratings and price targets for Valero Energy Partners and EQT Midstream Partners,, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Valero Energy Partners||0||2||6||0||2.75|
|EQT Midstream Partners,||0||3||4||0||2.57|
Valero Energy Partners presently has a consensus price target of $54.00, suggesting a potential upside of 23.82%. EQT Midstream Partners, has a consensus price target of $91.00, suggesting a potential upside of 24.15%. Given EQT Midstream Partners,’s higher possible upside, analysts clearly believe EQT Midstream Partners, is more favorable than Valero Energy Partners.
Volatility & Risk
Valero Energy Partners has a beta of 0.74, meaning that its stock price is 26% less volatile than the S&P 500. Comparatively, EQT Midstream Partners, has a beta of 0.89, meaning that its stock price is 11% less volatile than the S&P 500.
Institutional & Insider Ownership
31.9% of Valero Energy Partners shares are owned by institutional investors. Comparatively, 75.7% of EQT Midstream Partners, shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
This table compares Valero Energy Partners and EQT Midstream Partners,’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Valero Energy Partners||55.29%||361.72%||23.27%|
|EQT Midstream Partners,||66.99%||25.61%||16.75%|
EQT Midstream Partners, beats Valero Energy Partners on 10 of the 16 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.
EQT Midstream Partners, Company Profile
EQT Midstream Partners, LP (EQM) owns, operates, acquires and develops midstream assets in the Appalachian Basin. The Company’s segments include Gathering and Transmission. The Gathering segment primarily includes high pressure gathering lines and the Federal Energy Regulatory Commission (FERC)-regulated low pressure gathering system. Transmission includes EQM’s FERC-regulated interstate pipeline and storage business. The Company’s operations are primarily focused in southwestern Pennsylvania and northern West Virginia. As of December 31, 2016, the Company provided midstream services to EQT Corporation (EQT) and a range of third parties across 24 counties in Pennsylvania, West Virginia and Ohio through its two assets: the gathering system, which delivered natural gas from wells and other receipt points to transmission pipelines, and the transmission and storage system, which served as a header system transmission pipeline.
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