Western Gas Equity Partners (WGP) and Sprague Resources (SRLP) Head to Head Analysis
Western Gas Equity Partners (NYSE: WGP) and Sprague Resources (NYSE:SRLP) are both oils/energy companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, profitability, dividends, analyst recommendations, valuation and institutional ownership.
Insider & Institutional Ownership
17.3% of Western Gas Equity Partners shares are held by institutional investors. Comparatively, 22.0% of Sprague Resources shares are held 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.
Western Gas Equity Partners pays an annual dividend of $2.15 per share and has a dividend yield of 5.9%. Sprague Resources pays an annual dividend of $2.49 per share and has a dividend yield of 10.1%. 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. Sprague Resources pays out 139.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Western Gas Equity Partners has increased its dividend for 3 consecutive years and Sprague Resources has increased its dividend for 2 consecutive years.
This is a summary of recent ratings and price targets for Western Gas Equity Partners and Sprague Resources, as reported 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 target price of $50.50, indicating a potential upside of 39.70%. Sprague Resources has a consensus target price of $33.00, indicating a potential upside of 33.60%. Given Western Gas Equity Partners’ higher possible upside, research analysts clearly believe Western Gas Equity Partners is more favorable than Sprague Resources.
Earnings and Valuation
This table compares Western Gas Equity Partners and Sprague Resources’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Western Gas Equity Partners||$1.80 billion||4.39||$345.77 million||$1.65||21.91|
|Sprague Resources||$2.39 billion||0.23||$10.16 million||$1.79||13.80|
Western Gas Equity Partners has higher revenue, but lower earnings than Sprague Resources. Sprague Resources 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.
Volatility and Risk
Western Gas Equity Partners has a beta of 1.55, suggesting that its stock price is 55% more volatile than the S&P 500. Comparatively, Sprague Resources has a beta of 1.4, suggesting that its stock price is 40% more volatile than the S&P 500.
This table compares Western Gas Equity Partners and Sprague Resources’ 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%|
Western Gas Equity Partners beats Sprague Resources on 10 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 Sprague Resources
Sprague Resources LP is engaged in the purchase, storage, distribution and sale of refined products and natural gas, and provides storage and handling services for a range of materials. The Company operates through four segments: refined products, which purchases a range of refined products, such as heating oil, diesel fuel, residual fuel oil, asphalt, kerosene, jet fuel and gasoline from refining companies, trading organizations and producers; natural gas, which purchases natural gas from natural gas producers and trading companies, and sells and distributes natural gas to commercial and industrial customers in the Northeast and Mid-Atlantic United States; materials handling, which offloads, stores and prepares for delivery a range of customer-owned products, including asphalt, clay slurry, coal and heavy equipment, and other operations, which include the purchase and distribution of coal, certain commercial trucking activities and the heating equipment service business.
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