Financial Contrast: Delek US (NYSE:DK) vs. Sabine Royalty Trust (NYSE:SBR)

Delek US (NYSE:DK) and Sabine Royalty Trust (NYSE:SBR) are both energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, analyst recommendations, profitability, institutional ownership, risk, dividends and earnings.

Dividends

Delek US pays an annual dividend of $1.02 per share and has a dividend yield of 1.5%. Sabine Royalty Trust pays an annual dividend of $5.15 per share and has a dividend yield of 7.0%. Delek US pays out 28.7% of its earnings in the form of a dividend. Sabine Royalty Trust pays out 105.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Delek US has raised its dividend for 2 consecutive years.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Delek US and Sabine Royalty Trust, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Delek US	1	7	6	1	2.47
Sabine Royalty Trust	0	1	0	0	2.00

Delek US currently has a consensus price target of $52.38, suggesting a potential downside of 21.95%. Given Delek US’s stronger consensus rating and higher probable upside, equities analysts plainly believe Delek US is more favorable than Sabine Royalty Trust.

Volatility & Risk

Delek US has a beta of 0.57, suggesting that its share price is 43% less volatile than the S&P 500. Comparatively, Sabine Royalty Trust has a beta of 0.21, suggesting that its share price is 79% less volatile than the S&P 500.

Profitability

This table compares Delek US and Sabine Royalty Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Delek US	1.86%	109.03%	6.44%
Sabine Royalty Trust	94.90%	1,006.47%	882.96%

Earnings & Valuation

This table compares Delek US and Sabine Royalty Trust”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Delek US	$12.06 billion	0.34	-$22.80 million	$3.56	18.85
Sabine Royalty Trust	$77.53 million	13.75	$73.44 million	$4.90	14.92

Sabine Royalty Trust has lower revenue, but higher earnings than Delek US. Sabine Royalty Trust is trading at a lower price-to-earnings ratio than Delek US, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

97.0% of Delek US shares are held by institutional investors. Comparatively, 15.8% of Sabine Royalty Trust shares are held by institutional investors. 3.6% of Delek US shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

Delek US beats Sabine Royalty Trust on 11 of the 18 factors compared between the two stocks.

About Delek US

Delek US Holdings, Inc. engages in the integrated downstream energy business in the United States. The company operates through Refining, Logistics, and Retail segments. The Refining segment processes crude oil and other feedstock for the manufacture of various grades of gasoline, diesel fuel, aviation fuel, asphalt, and other petroleum-based products that are distributed through owned and third-party product terminal. It owns and operates refineries located in Tyler, Texas; El Dorado, Arkansas; Big Spring, Texas; and Krotz Springs, Louisiana, as well as biodiesel facilities in Crossett, Arkansas, Cleburne, Texas, and New Albany, Mississippi. The Logistics segment gathers, transports, and stores crude oil, intermediate, and refined products; and markets, distributes, transports, and stores refined products, as well as disposes and recycles water for third parties. It owns or leases crude oil transportation pipelines, refined product pipelines, crude oil gathering systems, and associated crude oil storage tanks; and owns and operates light product distribution terminals, as well as markets light products using third-party terminals. The Retail segment owns and leases convenience store sites located primarily in West Texas and New Mexico. Its convenience stores offer various grades of gasoline and diesel under the DK or Alon brand; and food products and service, tobacco products, non-alcoholic and alcoholic beverages, and general merchandise, as well as money orders to the public primarily under the 7-Eleven and DK or Alon brand names. It serves oil companies, independent refiners and marketers, jobbers, distributors, utility and transportation companies, government, and independent retail fuel operators. Delek US Holdings, Inc. was founded in 2001 and is headquartered in Brentwood, Tennessee.

About Sabine Royalty Trust

Sabine Royalty Trust holds royalty and mineral interests in various producing oil and gas properties in the United States. Its royalty and mineral interests include landowner's royalties, overriding royalty interests, minerals, production payments, and other similar non-participatory interest in certain producing and proved undeveloped oil and gas properties located in Florida, Louisiana, Mississippi, New Mexico, Oklahoma, and Texas. Sabine Royalty Trust was founded in 1982 and is based in Dallas, Texas.