Critical Comparison: Alon USA Energy (ALJ) and HollyFrontier Corp (NYSE:HOC)
Alon USA Energy (NYSE: ALJ) and HollyFrontier Corp (NYSE:HOC) are both energy companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, analyst recommendations, institutional ownership, dividends, valuation and profitabiliy.
This is a summary of current recommendations for Alon USA Energy and HollyFrontier Corp, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Alon USA Energy||0||4||1||0||2.20|
Alon USA Energy presently has a consensus price target of $11.38, indicating a potential downside of 14.60%. Given Alon USA Energy’s higher probable upside, analysts clearly believe Alon USA Energy is more favorable than HollyFrontier Corp.
Alon USA Energy pays an annual dividend of $0.60 per share and has a dividend yield of 4.5%. HollyFrontier Corp does not pay a dividend. Alon USA Energy pays out -107.1% of its earnings in the form of a dividend. HollyFrontier Corp has raised its dividend for 4 consecutive years.
Insider and Institutional Ownership
49.5% of Alon USA Energy shares are held by institutional investors. 8.8% of Alon USA Energy shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Valuation & Earnings
This table compares Alon USA Energy and HollyFrontier Corp’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Alon USA Energy||$4.13 billion||0.23||$146.56 million||($0.56)||-23.79|
Alon USA Energy has higher revenue and earnings than HollyFrontier Corp.
This table compares Alon USA Energy and HollyFrontier Corp’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Alon USA Energy||0.89%||5.65%||1.96%|
Alon USA Energy beats HollyFrontier Corp on 10 of the 11 factors compared between the two stocks.
Alon USA Energy Company Profile
Alon USA Energy, Inc. is an independent refiner and marketer of petroleum products, operating primarily in the South Central, Southwestern and Western regions of the United States. The Company’s segments include refining and marketing, asphalt and retail. Its refineries produce petroleum products, including various grades of gasoline, diesel, jet fuel, petrochemicals, petrochemical feedstocks, asphalt, and other petroleum-based products. As of December 31, 2016, it held interests in Alon USA Partners, LP, which owned a crude oil refinery in Big Spring, Texas, with a crude oil throughput capacity of 73,000 barrels per day and an integrated wholesale marketing business. In addition, it owned a crude oil refinery in Krotz Springs, Louisiana, with a crude oil throughput capacity of approximately 74,000 barrels per day (bpd), as of December 31, 2016. The Company also owns crude oil refineries in California. As of December 31, 2016, it operated approximately 300 convenience stores.
HollyFrontier Corp Company Profile
HollyFrontier Corporation is an independent petroleum refiner. The Company produces various light products, such as gasoline, diesel fuel, jet fuel, specialty lubricant products, and specialty and modified asphalt. It segments include Refining and Holly Energy Partners, L.P. (HEP). The Refining segment includes the operations of the Company’s El Dorado, Kansas (the El Dorado Refinery); refinery facilities located in Tulsa, Oklahoma (collectively, the Tulsa Refineries); a refinery in Artesia, New Mexico that is operated in conjunction with crude oil distillation and vacuum distillation and other facilities situated 65 miles away in Lovington, New Mexico (collectively, the Navajo Refinery); refinery located in Cheyenne, Wyoming (the Cheyenne Refinery); a refinery in Woods Cross, Utah (the Woods Cross Refinery), and HollyFrontier Asphalt Company (HFC Asphalt). The HEP segment involves all of the operations of HEP. HEP is a limited partnership, which owns and operates logistic assets.
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