Southcross Energy Partners, L.P. (SXE) & Western Refining Logistics, (WNRL) Critical Analysis
Southcross Energy Partners, L.P. (NYSE: SXE) and Western Refining Logistics, (NYSE:WNRL) are both small-cap oils/energy companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitabiliy, analyst recommendations, earnings, valuation, institutional ownership, risk and dividends.
Volatility and Risk
Southcross Energy Partners, L.P. has a beta of 4.19, suggesting that its share price is 319% more volatile than the S&P 500. Comparatively, Western Refining Logistics, has a beta of 0.81, suggesting that its share price is 19% less volatile than the S&P 500.
Western Refining Logistics, pays an annual dividend of $1.81 per share and has a dividend yield of 7.0%. Southcross Energy Partners, L.P. does not pay a dividend. Western Refining Logistics, pays out 166.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Southcross Energy Partners, L.P. has increased its dividend for 3 consecutive years and Western Refining Logistics, has increased its dividend for 2 consecutive years.
This table compares Southcross Energy Partners, L.P. and Western Refining Logistics,’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Southcross Energy Partners, L.P.||-16.23%||-16.40%||-7.97%|
|Western Refining Logistics,||3.07%||93.85%||13.03%|
Valuation & Earnings
This table compares Southcross Energy Partners, L.P. and Western Refining Logistics,’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Southcross Energy Partners, L.P.||$584.16 million||0.39||$58.15 million||($1.37)||-2.14|
|Western Refining Logistics,||$2.36 billion||0.67||$121.66 million||$1.09||23.62|
Western Refining Logistics, has higher revenue and earnings than Southcross Energy Partners, L.P.. Southcross Energy Partners, L.P. is trading at a lower price-to-earnings ratio than Western Refining Logistics,, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
2.7% of Southcross Energy Partners, L.P. shares are held by institutional investors. Comparatively, 44.8% of Western Refining Logistics, shares are held by institutional investors. 23.8% of Southcross Energy Partners, L.P. shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
This is a summary of current recommendations and price targets for Southcross Energy Partners, L.P. and Western Refining Logistics,, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Southcross Energy Partners, L.P.||0||0||0||0||N/A|
|Western Refining Logistics,||0||4||4||0||2.50|
Western Refining Logistics, has a consensus target price of $29.80, suggesting a potential upside of 15.73%. Given Western Refining Logistics,’s higher probable upside, analysts clearly believe Western Refining Logistics, is more favorable than Southcross Energy Partners, L.P..
Western Refining Logistics, beats Southcross Energy Partners, L.P. on 11 of the 15 factors compared between the two stocks.
Southcross Energy Partners, L.P. Company Profile
Southcross Energy Partners, L.P. provides natural gas gathering, processing, treating, compression and transportation services and natural gas liquid (NGL) fractionation and transportation services. The Company also sources, purchases, transports and sells natural gas and NGLs. Its assets are located in South Texas, Mississippi and Alabama As of December 31, 2016, its assets consisted of gathering systems, intrastate pipelines, two natural gas processing plants, one fractionation facility, 20 compressor stations and a treating system. Its gathering systems and intrastate pipelines include South Texas and Mississippi/Alabama. The assets in its South Texas region are located between Montgomery County, which is north of Houston, and Webb and Dimmit Counties near the Texas-Mexico border. The assets in its Mississippi region are located principally in the southern half of the state and consist of intrastate pipeline system in Mississippi.
Western Refining Logistics, Company Profile
Western Refining Logistics, LP owns, operates, develops, and acquires logistics and related assets and businesses to include terminals, storage tanks, pipelines and other logistics assets related to the terminaling, transportation, storage and distribution of crude oil and refined products. The Company’s segments include logistics and wholesale. The Company operates its logistics business and wholesale business under commercial and service agreements with Western Refining, Inc. (Western). Its logistics assets consist of pipeline and gathering infrastructure and terminalling, transportation and storage assets in the Southwest and the Upper Great Plains region. Its wholesale business purchases its petroleum fuels from Western, and its lubricants and additional petroleum fuels from third-party suppliers.
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