Head-To-Head Review: HollyFrontier Corporation (HFC) versus Delek US Holdings (DK)
HollyFrontier Corporation (NYSE: HFC) and Delek US Holdings (NYSE:DK) are both oils/energy companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, risk, earnings, profitabiliy, dividends, valuation and analyst recommendations.
Earnings and Valuation
This table compares HollyFrontier Corporation and Delek US Holdings’ top-line revenue, earnings per share 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)||-14.83|
|Delek US Holdings||$4.49 billion||0.37||$114.30 million||($1.82)||-14.79|
HollyFrontier Corporation has higher revenue and earnings than Delek US Holdings. HollyFrontier Corporation is trading at a lower price-to-earnings ratio than Delek US Holdings, indicating that it is currently the more affordable of the two stocks.
This table compares HollyFrontier Corporation and Delek US Holdings’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Delek US Holdings||-2.37%||-2.83%||-1.11%|
Insider and Institutional Ownership
84.7% of HollyFrontier Corporation shares are held by institutional investors. Comparatively, 96.8% of Delek US Holdings shares are held by institutional investors. 0.5% of HollyFrontier Corporation shares are held by insiders. Comparatively, 1.4% of Delek US Holdings shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
HollyFrontier Corporation pays an annual dividend of $1.32 per share and has a dividend yield of 4.8%. Delek US Holdings pays an annual dividend of $0.60 per share and has a dividend yield of 2.2%. HollyFrontier Corporation pays out -70.6% of its earnings in the form of a dividend. Delek US Holdings pays out -33.0% 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. Delek US Holdings has increased its dividend for 5 consecutive years. HollyFrontier Corporation is clearly the better dividend stock, given its higher yield and lower payout ratio.
This is a summary of current recommendations and price targets for HollyFrontier Corporation and Delek US Holdings, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Delek US Holdings||0||14||2||0||2.13|
HollyFrontier Corporation currently has a consensus target price of $32.70, suggesting a potential upside of 17.88%. Delek US Holdings has a consensus target price of $23.29, suggesting a potential downside of 13.47%. Given HollyFrontier Corporation’s higher possible upside, equities research analysts plainly believe HollyFrontier Corporation is more favorable than Delek US Holdings.
Risk and Volatility
HollyFrontier Corporation has a beta of 1.24, indicating that its share price is 24% more volatile than the S&P 500. Comparatively, Delek US Holdings has a beta of 1.94, indicating that its share price is 94% more volatile than the S&P 500.
HollyFrontier Corporation beats Delek US Holdings on 8 of the 15 factors compared between the two stocks.
About HollyFrontier Corporation
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.
About Delek US Holdings
Delek US Holdings, Inc. is an integrated downstream energy business focused on petroleum refining and the transportation, storage and wholesale of crude oil, intermediate and refined products. The Company operates through two segments: Refining and Logistics. The Company’s refining segment operates independent refineries in Tyler, Texas (the Tyler refinery) and El Dorado, Arkansas (the El Dorado refinery). The Company’s logistics segment gathers, transports and stores crude oil and markets, distributes, transports and stores refined products in select regions of the southeastern United States and west Texas for both its refining segment and third parties. As of December 31, 2016, the Company’s refineries located in Tyler, Texas and El Dorado, Arkansas, represented a combined 155,000 barrels per day (bpd) of crude throughput capacity. Its refining system produces a range of petroleum-based products used in transportation and industrial markets.
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