Critical Contrast: Nustar GP Holdings (NYSE:NSH) and Holly Energy Partners, L.P. (HEP)
Nustar GP Holdings (NYSE: NSH) and Holly Energy Partners, L.P. (NYSE:HEP) are both oils/energy companies, but which is the better stock? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, profitabiliy, earnings, valuation, risk and dividends.
Earnings & Valuation
This table compares Nustar GP Holdings and Holly Energy Partners, L.P.’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Nustar GP Holdings||$57.19 million||18.10||$54.98 million||$1.28||18.83|
|Holly Energy Partners, L.P.||$405.67 million||5.28||$264.97 million||$1.31||25.60|
Holly Energy Partners, L.P. has higher revenue and earnings than Nustar GP Holdings. Nustar GP Holdings is trading at a lower price-to-earnings ratio than Holly Energy Partners, L.P., indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Nustar GP Holdings has a beta of 1.19, meaning that its stock price is 19% more volatile than the S&P 500. Comparatively, Holly Energy Partners, L.P. has a beta of 0.85, meaning that its stock price is 15% less volatile than the S&P 500.
This table compares Nustar GP Holdings and Holly Energy Partners, L.P.’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Nustar GP Holdings||96.84%||22.15%||19.72%|
|Holly Energy Partners, L.P.||34.72%||35.38%||8.78%|
Nustar GP Holdings pays an annual dividend of $2.18 per share and has a dividend yield of 9.0%. Holly Energy Partners, L.P. pays an annual dividend of $2.48 per share and has a dividend yield of 7.4%. Nustar GP Holdings pays out 170.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. 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. Holly Energy Partners, L.P. has increased its dividend for 13 consecutive years. Nustar GP Holdings is clearly the better dividend stock, given its higher yield and lower payout ratio.
Institutional and Insider Ownership
56.1% of Nustar GP Holdings shares are held by institutional investors. Comparatively, 46.5% of Holly Energy Partners, L.P. shares are held by institutional investors. 21.4% of Nustar GP Holdings shares are held by insiders. Comparatively, 0.8% of Holly 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 breakdown of recent ratings and target prices for Nustar GP Holdings and Holly Energy Partners, L.P., as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Nustar GP Holdings||1||6||0||0||1.86|
|Holly Energy Partners, L.P.||1||3||0||0||1.75|
Nustar GP Holdings currently has a consensus target price of $28.00, indicating a potential upside of 16.18%. Holly Energy Partners, L.P. has a consensus target price of $35.33, indicating a potential upside of 5.35%. Given Nustar GP Holdings’ stronger consensus rating and higher probable upside, research analysts plainly believe Nustar GP Holdings is more favorable than Holly Energy Partners, L.P..
Nustar GP Holdings beats Holly Energy Partners, L.P. on 10 of the 16 factors compared between the two stocks.
About Nustar GP Holdings
NuStar GP Holdings, LLC holds interests in NuStar Energy L.P. (NuStar Energy). NuStar Energy is engaged in the transportation of petroleum products and anhydrous ammonia, the terminalling and storage of petroleum products and the marketing of petroleum products. NuStar Energy has terminal and storage facilities in the United States, Canada, Mexico, the Netherlands, including St. Eustatius in the Caribbean, and the United Kingdom. The Company manages NuStar Energy through its ownership of NuStar GP, LLC and Riverwalk Holdings, LLC, which own Riverwalk Logistics L.P., the general partner of NuStar Energy.
About Holly Energy Partners, L.P.
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.
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