Ultrapar Participacoes (UGP) vs. TravelCenters of America (TA) Critical Analysis
Ultrapar Participacoes (NYSE: UGP) and TravelCenters of America (NASDAQ:TA) are both oils/energy companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, profitability, risk, earnings, dividends and valuation.
Volatility & Risk
Ultrapar Participacoes has a beta of 1.1, meaning that its share price is 10% more volatile than the S&P 500. Comparatively, TravelCenters of America has a beta of 2.43, meaning that its share price is 143% more volatile than the S&P 500.
Earnings & Valuation
This table compares Ultrapar Participacoes and TravelCenters of America’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Ultrapar Participacoes||$22.30 billion||0.57||$447.70 million||$0.80||28.44|
|TravelCenters of America||$5.51 billion||0.03||-$1.92 million||$0.59||8.14|
Ultrapar Participacoes has higher revenue and earnings than TravelCenters of America. TravelCenters of America is trading at a lower price-to-earnings ratio than Ultrapar Participacoes, indicating that it is currently the more affordable of the two stocks.
This table compares Ultrapar Participacoes and TravelCenters of America’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|TravelCenters of America||0.40%||-1.79%||-0.59%|
Institutional & Insider Ownership
4.0% of Ultrapar Participacoes shares are owned by institutional investors. Comparatively, 38.7% of TravelCenters of America shares are owned by institutional investors. 8.5% of TravelCenters of America 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.
Ultrapar Participacoes pays an annual dividend of $0.54 per share and has a dividend yield of 2.4%. TravelCenters of America does not pay a dividend. Ultrapar Participacoes pays out 67.5% of its earnings in the form of a dividend.
This is a breakdown of recent ratings and target prices for Ultrapar Participacoes and TravelCenters of America, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|TravelCenters of America||1||0||2||0||2.33|
TravelCenters of America has a consensus target price of $8.17, indicating a potential upside of 70.14%. Given TravelCenters of America’s stronger consensus rating and higher possible upside, analysts clearly believe TravelCenters of America is more favorable than Ultrapar Participacoes.
Ultrapar Participacoes beats TravelCenters of America on 8 of the 15 factors compared between the two stocks.
About Ultrapar Participacoes
Ultrapar Participacoes SA is a Brazil-based company primarily engaged in the automotive fuel retail. The Company operates in five segments: Gas distribution (Ultragaz), which distributes liquefied petroleum gas (LPG) to residential, commercial and industrial consumers in the South, Southeast and Northeast regions of Brazil; Fuel distribution (Ipiranga), which operates the distribution and marketing of gasoline, ethanol, diesel, fuel oil, kerosene, natural gas for vehicles and lubricants, as well as provides related activities across the Brazilian territory; Chemicals (Oxiteno), which produces ethylene oxide, as well as its primary derivatives and fatty alcohols; Storage (Ultracargo), which operates liquid bulk terminals, primarily in the Southeast and Northeast regions of Brazil, and Drugstores (Extrafarma), which trades pharmaceutical, hygiene and beauty products through its drugstore chain in the states of Para and Piaui, among others.
About TravelCenters of America
TravelCenters of America LLC (TravelCenters) operates and franchises travel centers and convenience store and restaurant locations. The Company’s segments include travel centers, convenience stores, and corporate and other. The Company offers a range of products and services, including diesel fuel and gasoline, as well as nonfuel products and services, such as truck repair and maintenance services, full service restaurants, quick service restaurants (QSRs), travel/convenience stores and various customer amenities. Its customers include trucking fleets and their drivers, independent truck drivers, highway and local motorists, and casual diners. As of December 31, 2016, the Company’s business included 255 travel centers in 43 states in the United States primarily along the United States interstate highway system, and the province of Ontario, Canada. As of December 31, 2016, the Company’s business included 233 convenience stores in 11 states in the United States.
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