HollyFrontier Corporation (NYSE: HFC) and Alon USA Energy (NYSE:ALJ) are both oils/energy companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, valuation, analyst recommendations, earnings, profitabiliy, risk and dividends.

Analyst Recommendations

This is a summary of recent ratings and target prices for HollyFrontier Corporation and Alon USA Energy, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
HollyFrontier Corporation 3 7 2 0 1.92
Alon USA Energy 0 3 1 0 2.25

HollyFrontier Corporation presently has a consensus price target of $32.70, indicating a potential upside of 20.18%. Alon USA Energy has a consensus price target of $11.38, indicating a potential downside of 14.60%. Given HollyFrontier Corporation’s higher possible upside, equities research analysts plainly believe HollyFrontier Corporation is more favorable than Alon USA Energy.

Valuation & Earnings

This table compares HollyFrontier Corporation and Alon USA Energy’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
HollyFrontier Corporation $11.60 billion 0.42 $838.07 million ($1.87) -14.55
Alon USA Energy N/A N/A N/A ($0.56) -23.79

HollyFrontier Corporation has higher revenue and earnings than Alon USA Energy. Alon USA Energy is trading at a lower price-to-earnings ratio than HollyFrontier Corporation, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

84.7% of HollyFrontier Corporation shares are held by institutional investors. Comparatively, 49.5% of Alon USA Energy shares are held by institutional investors. 0.5% of HollyFrontier Corporation shares are held by company insiders. Comparatively, 8.8% of Alon USA Energy shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Dividends

HollyFrontier Corporation pays an annual dividend of $1.32 per share and has a dividend yield of 4.9%. Alon USA Energy pays an annual dividend of $0.60 per share and has a dividend yield of 4.5%. HollyFrontier Corporation pays out -70.6% of its earnings in the form of a dividend. Alon USA Energy pays out -107.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. HollyFrontier Corporation has raised its dividend for 5 consecutive years and Alon USA Energy has raised its dividend for 4 consecutive years. HollyFrontier Corporation is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares HollyFrontier Corporation and Alon USA Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
HollyFrontier Corporation -2.82% 1.37% 0.79%
Alon USA Energy 0.89% 5.65% 1.96%

Risk and Volatility

HollyFrontier Corporation has a beta of 1.23, suggesting that its stock price is 23% more volatile than the S&P 500. Comparatively, Alon USA Energy has a beta of 1.14, suggesting that its stock price is 14% more volatile than the S&P 500.

HollyFrontier Corporation 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.

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.

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