Crossamerica Partners (NYSE: CAPL) and Ferrellgas Partners (NYSE:FGP) are both small-cap oils/energy companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, earnings, valuation, risk, institutional ownership, dividends and analyst recommendations.

Dividends

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Crossamerica Partners pays an annual dividend of $2.51 per share and has a dividend yield of 11.8%. Ferrellgas Partners pays an annual dividend of $0.40 per share and has a dividend yield of 12.8%. Crossamerica Partners pays out 456.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ferrellgas Partners pays out -39.6% of its earnings in the form of a dividend. Ferrellgas Partners has raised its dividend for 2 consecutive years. Ferrellgas Partners is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

33.7% of Crossamerica Partners shares are owned by institutional investors. Comparatively, 5.6% of Ferrellgas Partners shares are owned by institutional investors. 0.5% of Ferrellgas Partners shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings for Crossamerica Partners and Ferrellgas Partners, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Crossamerica Partners 0 4 3 0 2.43
Ferrellgas Partners 1 2 0 0 1.67

Crossamerica Partners presently has a consensus target price of $29.00, suggesting a potential upside of 36.73%. Ferrellgas Partners has a consensus target price of $5.00, suggesting a potential upside of 60.26%. Given Ferrellgas Partners’ higher probable upside, analysts clearly believe Ferrellgas Partners is more favorable than Crossamerica Partners.

Valuation & Earnings

This table compares Crossamerica Partners and Ferrellgas Partners’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Crossamerica Partners $2.09 billion 0.35 $23.15 million $0.55 38.56
Ferrellgas Partners $1.93 billion 0.16 -$54.20 million ($1.01) -3.09

Crossamerica Partners has higher revenue and earnings than Ferrellgas Partners. Ferrellgas Partners is trading at a lower price-to-earnings ratio than Crossamerica Partners, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Crossamerica Partners has a beta of 1.17, suggesting that its stock price is 17% more volatile than the S&P 500. Comparatively, Ferrellgas Partners has a beta of 0.44, suggesting that its stock price is 56% less volatile than the S&P 500.

Profitability

This table compares Crossamerica Partners and Ferrellgas Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Crossamerica Partners 1.00% 5.84% 1.17%
Ferrellgas Partners -4.54% N/A -2.98%

Summary

Crossamerica Partners beats Ferrellgas Partners on 12 of the 17 factors compared between the two stocks.

Crossamerica Partners Company Profile

CrossAmerica Partners LP is a limited partnership engaged in the wholesale distribution of motor fuel, and the ownership and leasing of real estate used in the retail distribution of motor fuel. The Company operates in two segments: wholesale and retail. The wholesale segment is engaged in the wholesale distribution of motor fuel to lessee dealers, independent dealers, commission agents, Dunne Manning Stores LLC (DMS), CST Brands, Inc. and subsidiaries (CST) and company operated retail sites. The Retail segment owns or leases and operates retail sites. As of December 31, 2016, it distributed motor fuels to approximately 1,200 sites located in 29 states (Arizona, Arkansas, Colorado, Delaware, Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Dakota, Tennessee, Texas, Virginia, West Virginia and Wisconsin).

Ferrellgas Partners Company Profile

Ferrellgas Partners, L.P. is engaged in the retail distribution of propane and related equipment sales, and midstream operations, which include crude oil logistics. The Company’s segments include propane and related equipment sales, midstream operations-crude oil logistics, and corporate and other. The propane and related equipment sales segment consists of the distribution of propane and related equipment and supplies. The midstream operations-crude oil logistics segment is engaged in providing crude oil transportation and logistics services. The corporate and other segment includes midstream operations-water solutions. The Company’s two subsidiaries include Ferrellgas Partners Finance Corp. and the operating partnership. Its general partner performs all management functions for the Company and holds general partner interest in Ferrellgas Partners and the operating partnership. It is a distributor of propane and related equipment and supplies to customers in the United States.

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