Financial Analysis: Holly Energy Partners, L.P. (NYSE:HEP) vs. Nustar Energy L.P. (NS)
Holly Energy Partners, L.P. (NYSE: HEP) and Nustar Energy L.P. (NYSE:NS) are both mid-cap oils/energy companies, but which is the superior stock? We will compare the two businesses based on the strength of their profitabiliy, risk, institutional ownership, valuation, earnings, analyst recommendations and dividends.
Valuation & Earnings
This table compares Holly Energy Partners, L.P. and Nustar Energy L.P.’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Holly Energy Partners, L.P.||$405.67 million||5.30||$264.97 million||$1.31||25.66|
|Nustar Energy L.P.||$1.84 billion||2.38||$582.14 million||$1.19||39.56|
Nustar Energy L.P. has higher revenue and earnings than Holly Energy Partners, L.P.. Holly Energy Partners, L.P. is trading at a lower price-to-earnings ratio than Nustar Energy L.P., indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
46.5% of Holly Energy Partners, L.P. shares are held by institutional investors. Comparatively, 46.2% of Nustar Energy L.P. shares are held by institutional investors. 0.8% of Holly Energy Partners, L.P. shares are held by company insiders. Comparatively, 4.1% of Nustar Energy L.P. shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
This is a summary of recent ratings and price targets for Holly Energy Partners, L.P. and Nustar Energy L.P., as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Holly Energy Partners, L.P.||1||3||0||0||1.75|
|Nustar Energy L.P.||0||8||2||0||2.20|
Holly Energy Partners, L.P. presently has a consensus price target of $35.33, indicating a potential upside of 5.13%. Nustar Energy L.P. has a consensus price target of $50.25, indicating a potential upside of 6.73%. Given Nustar Energy L.P.’s stronger consensus rating and higher possible upside, analysts plainly believe Nustar Energy L.P. is more favorable than Holly Energy Partners, L.P..
Holly Energy Partners, L.P. pays an annual dividend of $2.48 per share and has a dividend yield of 7.4%. Nustar Energy L.P. pays an annual dividend of $4.38 per share and has a dividend yield of 9.3%. Holly Energy Partners, L.P. pays out 189.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Nustar Energy L.P. pays out 368.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Holly Energy Partners, L.P. has raised its dividend for 13 consecutive years.
Risk and Volatility
Holly Energy Partners, L.P. has a beta of 0.85, indicating that its share price is 15% less volatile than the S&P 500. Comparatively, Nustar Energy L.P. has a beta of 1.39, indicating that its share price is 39% more volatile than the S&P 500.
This table compares Holly Energy Partners, L.P. and Nustar Energy L.P.’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Holly Energy Partners, L.P.||34.72%||35.38%||8.78%|
|Nustar Energy L.P.||8.19%||10.56%||3.02%|
Nustar Energy L.P. beats Holly Energy Partners, L.P. on 9 of the 17 factors compared between the two stocks.
Holly Energy Partners, L.P. Company Profile
Holly Energy Partners, L.P., (HEP) is engaged in the business of operating a system of petroleum product and crude pipelines, storage tanks, distribution terminals, loading rack facilities and refinery processing units in West Texas, New Mexico, Utah, Nevada, Oklahoma, Wyoming, Kansas, Arizona, Idaho and Washington. The Company operates through segments, including pipelines and terminals segment and a refinery processing unit segment. As of December 31, 2016, its pipelines and terminals segment consisted of 24 main pipeline segments; Crude gathering networks in Texas and New Mexico; 10 refined product terminals; one crude terminal; 8,300 track feet of rail storage located at one facility; seven locations with truck and/or rail racks, and Tankage at all six of HollyFrontier Corporation’s (HFC’s) refining facility locations. As of December 31, 2016, the Company’s refinery processing unit segment consisted of five refinery processing units at two of HFC’s refining facility locations.
Nustar Energy L.P. Company Profile
NuStar Energy L.P. is engaged in the transportation of petroleum products and anhydrous ammonia; the terminalling and storage of petroleum products, and the marketing of petroleum products. The Company’s segments include pipeline, storage and fuels marketing. The pipeline segment consists of the transportation of refined petroleum products, crude oil and anhydrous ammonia. The storage segment consists of facilities that provide storage, handling and other services for petroleum products, crude oil, specialty chemicals and other liquids. The fuels marketing segment involve the purchase of crude oil, fuel oil, bunker fuel, fuel oil blending components and other refined products for resale. It conducts its operations through its subsidiaries, primarily NuStar Logistics, L.P. and NuStar Pipeline Operating Partnership L.P. As of May 4, 2017, it had more than 9,200 miles of pipeline and 81 terminal and storage facilities that provide approximately 96 million barrels of storage capacity.
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