Reviewing Western Gas Equity Partners (WGP) & CVR Refining (CVRR)
Western Gas Equity Partners (NYSE: WGP) and CVR Refining (NYSE:CVRR) are both oils/energy companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, dividends, earnings, valuation, risk, analyst recommendations and institutional ownership.
This table compares Western Gas Equity Partners and CVR Refining’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Western Gas Equity Partners||16.96%||8.99%||4.69%|
Institutional & Insider Ownership
18.4% of Western Gas Equity Partners shares are owned by institutional investors. Comparatively, 12.8% of CVR Refining shares are owned by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
This is a breakdown of current ratings and target prices for Western Gas Equity Partners and CVR Refining, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Western Gas Equity Partners||0||2||6||0||2.75|
Western Gas Equity Partners presently has a consensus price target of $50.50, indicating a potential upside of 38.36%. CVR Refining has a consensus price target of $11.50, indicating a potential downside of 8.73%. Given Western Gas Equity Partners’ stronger consensus rating and higher possible upside, equities research analysts clearly believe Western Gas Equity Partners is more favorable than CVR Refining.
Risk and Volatility
Western Gas Equity Partners has a beta of 1.51, meaning that its share price is 51% more volatile than the S&P 500. Comparatively, CVR Refining has a beta of 1.39, meaning that its share price is 39% more volatile than the S&P 500.
Earnings & Valuation
This table compares Western Gas Equity Partners and CVR Refining’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Western Gas Equity Partners||$1.80 billion||4.43||$345.77 million||$1.65||22.12|
|CVR Refining||$4.43 billion||0.42||$15.30 million||$0.72||17.50|
Western Gas Equity Partners has higher earnings, but lower revenue than CVR Refining. CVR Refining is trading at a lower price-to-earnings ratio than Western Gas Equity Partners, indicating that it is currently the more affordable of the two stocks.
Western Gas Equity Partners pays an annual dividend of $2.15 per share and has a dividend yield of 5.9%. CVR Refining pays an annual dividend of $3.76 per share and has a dividend yield of 29.8%. Western Gas Equity Partners pays out 130.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. CVR Refining pays out 522.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. CVR Refining has raised its dividend for 3 consecutive years. CVR Refining is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Western Gas Equity Partners beats CVR Refining on 13 of the 16 factors compared between the two stocks.
About Western Gas Equity Partners
Western Gas Equity Partners, LP is a limited partnership. The Company is formed to own approximately three types of partnership interests in Western Gas Partners, LP (WES). WES is an master limited partnership (MLP) engaged in the business of gathering, compressing, treating, processing and transporting natural gas, and gathering, stabilizing and transporting condensate, natural gas liquids (NGLs) and crude oil. WES provides these midstream services for Anadarko Petroleum Corporation (Anadarko), as well as for third-party producers and customers. Its assets and investments are located in the Rocky Mountains (Colorado, Utah and Wyoming), North-central Pennsylvania and Texas. The Bison treating facility treats and compresses gas from coal-bed methane wells in the Powder River Basin of Wyoming. MIGC, LLC receives gas from various coal-bed methane gathering systems in the Powder River Basin and the Hilight system, as well as from WBI Energy Transmission, Inc.
About CVR Refining
CVR Refining, LP is an independent downstream energy limited partnership with refining and related logistics assets that operates in the mid-continent region. The Company is a petroleum refiner. It owned and operated a complex full coking medium-sour crude oil refinery in Coffeyville, Kansas with a rated capacity of 115,000 barrels per calendar day (bpcd) and a complex crude oil refinery in Wynnewood, Oklahoma with a rated capacity of 70,000 bpcd capable of processing 20,000 bpcd of light sour crude oils (within its rated capacity of 70,000 bpcd), as of December 31, 2016. In addition, it also controlled and operated supporting logistics assets, including approximately 340 miles of active owned and leased pipelines, approximately 150 crude oil transports, a network of crude oil gathering tank farms, approximately 6.4 million barrels of owned and leased crude oil storage and over 4.5 million barrels of combined refined products and feedstocks storage capacity, as of December 31, 2016.
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