Tallgrass Energy Partners, (NYSE: TEP) and Delek Logistics Partners, L.P. (NYSE:DKL) are both oils/energy companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, profitability, dividends, analyst recommendations, institutional ownership, earnings and risk.

Insider & Institutional Ownership

62.1% of Tallgrass Energy Partners, shares are owned by institutional investors. Comparatively, 28.8% of Delek Logistics Partners, L.P. shares are owned by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Volatility & Risk

Tallgrass Energy Partners, has a beta of 1.04, indicating that its share price is 4% more volatile than the S&P 500. Comparatively, Delek Logistics Partners, L.P. has a beta of 1.3, indicating that its share price is 30% more volatile than the S&P 500.

Profitability

This table compares Tallgrass Energy Partners, and Delek Logistics Partners, L.P.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Tallgrass Energy Partners, 46.63% 20.47% 9.01%
Delek Logistics Partners, L.P. 12.70% -368.38% 15.15%

Valuation and Earnings

This table compares Tallgrass Energy Partners, and Delek Logistics Partners, L.P.’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Tallgrass Energy Partners, $614.20 million 5.73 $351.11 million $2.23 21.59
Delek Logistics Partners, L.P. $488.39 million 1.55 $100.26 million $1.90 16.39

Tallgrass Energy Partners, has higher revenue and earnings than Delek Logistics Partners, L.P.. Delek Logistics Partners, L.P. is trading at a lower price-to-earnings ratio than Tallgrass Energy Partners,, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Tallgrass Energy Partners, and Delek Logistics Partners, L.P., as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Tallgrass Energy Partners, 0 4 5 0 2.56
Delek Logistics Partners, L.P. 0 2 1 0 2.33

Tallgrass Energy Partners, currently has a consensus target price of $61.38, indicating a potential upside of 27.49%. Delek Logistics Partners, L.P. has a consensus target price of $33.50, indicating a potential upside of 7.54%. Given Tallgrass Energy Partners,’s stronger consensus rating and higher probable upside, analysts clearly believe Tallgrass Energy Partners, is more favorable than Delek Logistics Partners, L.P..

Dividends

Tallgrass Energy Partners, pays an annual dividend of $3.70 per share and has a dividend yield of 7.7%. Delek Logistics Partners, L.P. pays an annual dividend of $2.82 per share and has a dividend yield of 9.1%. Tallgrass Energy Partners, pays out 165.9% 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 Logistics Partners, L.P. pays out 148.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Tallgrass Energy Partners, has raised its dividend for 3 consecutive years and Delek Logistics Partners, L.P. has raised its dividend for 3 consecutive years. Delek Logistics Partners, L.P. is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Tallgrass Energy Partners, beats Delek Logistics Partners, L.P. on 11 of the 15 factors compared between the two stocks.

Tallgrass Energy Partners, Company Profile

Tallgrass Energy Partners, LP owns, operates, acquires and develops midstream energy assets in North America. The Company operates through three segments: Crude Oil Transportation & Logistics, Natural Gas Transportation & Logistics and Processing & Logistics. The Crude Oil Transportation & Logistics segment includes the ownership and operation of a Federal Energy Regulatory Commission (FERC) crude oil pipeline system, and crude oil storage and terminaling facilities. The Natural Gas Transportation & Logistics segment is engaged in the ownership and operation of FERC regulated interstate natural gas pipelines and integrated natural gas storage facilities. The Processing & Logistics segment is engaged in the ownership and operation of natural gas processing, treating and fractionation facilities; the provision of water business services primarily to the oil and gas exploration and production industry, and the transportation of natural gas liquids (NGLs).

Delek Logistics Partners, L.P. Company Profile

Delek Logistics Partners, LP owns and operates logistics and marketing assets for crude oil, and intermediate and refined products. The Company’s business primarily consists of certain crude oil, intermediate and refined products pipelines and transportation, storage, wholesale marketing, terminaling and offloading assets, which were previously owned, operated or held by Delek US Holdings, Inc. (Delek), and assets acquired from unrelated third parties. The Company operates through two segments: Pipelines and Transportation segment, and Wholesale Marketing and Terminalling segment. The Company engaged in the gathering, transporting and storing crude oil; storing intermediate products and feed stocks, and marketing, distributing, transporting, offloading and storing refined products. The Company also provides crude oil, intermediate and refined products transportation services for terminaling, and marketing services to third parties primarily in Texas, Tennessee and Arkansas.

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