Financial Analysis: JP Energy Partners (JPEP) & Questar (STR)
JP Energy Partners (NYSE: JPEP) and Questar (NYSE:STR) are both utilities companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, risk, profitabiliy, institutional ownership, valuation, earnings and analyst recommendations.
This table compares JP Energy Partners and Questar’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|JP Energy Partners||-5.61%||-5.99%||-4.01%|
Earnings and Valuation
This table compares JP Energy Partners and Questar’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|JP Energy Partners||N/A||N/A||N/A||($1.59)||-5.94|
JP Energy Partners is trading at a lower price-to-earnings ratio than Questar, indicating that it is currently the more affordable of the two stocks.
JP Energy Partners pays an annual dividend of $1.30 per share and has a dividend yield of 13.8%. Questar pays an annual dividend of $0.88 per share and has a dividend yield of 3.5%. JP Energy Partners pays out -81.8% of its earnings in the form of a dividend. Questar pays out 79.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Questar has increased its dividend for 37 consecutive years. JP Energy Partners is clearly the better dividend stock, given its higher yield and lower payout ratio.
Insider & Institutional Ownership
53.4% of JP Energy Partners shares are owned by institutional investors. Comparatively, 78.9% of Questar shares are owned by institutional investors. 0.4% of Questar shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
This is a breakdown of recent ratings for JP Energy Partners and Questar, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|JP Energy Partners||0||1||1||0||2.50|
JP Energy Partners currently has a consensus target price of $11.00, indicating a potential upside of 16.53%. Questar has a consensus target price of $25.00, indicating a potential downside of 0.24%. Given JP Energy Partners’ stronger consensus rating and higher possible upside, analysts clearly believe JP Energy Partners is more favorable than Questar.
Volatility and Risk
JP Energy Partners has a beta of 3.3, meaning that its share price is 230% more volatile than the S&P 500. Comparatively, Questar has a beta of 0.51, meaning that its share price is 49% less volatile than the S&P 500.
Questar beats JP Energy Partners on 7 of the 13 factors compared between the two stocks.
About JP Energy Partners
JP Energy Partners LP owns, operates, develops and acquires a portfolio of midstream energy assets. The Company provides midstream infrastructure solutions for the supply of crude oil, refined products and natural gas liquids (NGLs) in the United States. The Company’s segments include crude oil pipelines and storage, refined products terminals and storage, and NGL distribution and sales. The Company’s crude oil businesses are situated in areas, including the Permian Basin and Eagle Ford shale. Its crude oil pipelines and storage segment manages the physical movement of crude oil from origination to final destination through its network of owned and leased assets. Its refined product terminals and storage segment consists of approximately two refined products terminals located in North Little Rock, Arkansas and Caddo Mills, Texas. The Company’s NGL distribution and sales segment involves the retail, commercial and wholesale sale of NGLs and other refined products.
Dominion Questar Corp, formerly Questar Corporation, is an integrated natural gas holding company. The Company, through its subsidiaries is principally engaged in three lines of business, which include Questar Gas Company (Questar Gas), which provides retail natural gas distribution in Utah, Wyoming and Idaho; Wexpro Company (Wexpro), which develops and produces natural gas from cost-of-service reserves for Questar Gas customers, and Questar Pipeline Company, which operates interstate natural gas pipelines and storage facilities in the western the United States and provides other energy services. The Company is also engaged in Corporate and Other operations, which include Questar Fueling Company (Questar Fueling) that builds, owns and operates compressed natural gas (CNG) fueling stations for fleet operators with medium- and heavy-duty trucks and tractors. Questar Gas distributes gas to customers along the Wasatch Front, Provo, Salt Lake, Ogden and other areas in Utah.
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