Head-To-Head Comparison: CST Brands (CST) versus Ultrapar Participacoes (NYSE:UGP)
CST Brands (NYSE: CST) and Ultrapar Participacoes (NYSE:UGP) are both energy companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, earnings, institutional ownership, analyst recommendations, risk, valuation and profitabiliy.
CST Brands pays an annual dividend of $0.06 per share and has a dividend yield of 0.1%. Ultrapar Participacoes pays an annual dividend of $0.52 per share and has a dividend yield of 2.2%. CST Brands pays out 1.5% of its earnings in the form of a dividend. Ultrapar Participacoes pays out 61.2% 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.
This table compares CST Brands and Ultrapar Participacoes’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a summary of recent ratings and recommmendations for CST Brands and Ultrapar Participacoes, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
CST Brands currently has a consensus price target of $45.88, indicating a potential downside of 5.46%. Given CST Brands’ higher possible upside, equities research analysts clearly believe CST Brands is more favorable than Ultrapar Participacoes.
Institutional and Insider Ownership
85.7% of CST Brands shares are held by institutional investors. Comparatively, 4.3% of Ultrapar Participacoes shares are held by institutional investors. 2.1% of CST Brands shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Risk & Volatility
CST Brands has a beta of 1.04, indicating that its share price is 4% more volatile than the S&P 500. Comparatively, Ultrapar Participacoes has a beta of 1.12, indicating that its share price is 12% more volatile than the S&P 500.
Earnings & Valuation
This table compares CST Brands and Ultrapar Participacoes’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Ultrapar Participacoes||$24.05 billion||0.54||$1.26 billion||$0.85||28.04|
Ultrapar Participacoes has higher revenue and earnings than CST Brands. CST Brands is trading at a lower price-to-earnings ratio than Ultrapar Participacoes, indicating that it is currently the more affordable of the two stocks.
Ultrapar Participacoes beats CST Brands on 6 of the 11 factors compared between the two stocks.
About CST Brands
CST Brands LLC, formerly CST Brands, Inc., is a holding company. The Company is an independent retail of motor fuel and convenience merchandise in the United States and eastern Canada. Its segments include U.S. Retail, Canadian Retail and CrossAmerica. As of December 31, 2016, its U.S. Retail segment had 1,167 Company-operated retail sites located in Arkansas, Arizona, Colorado, Florida, Georgia, Louisiana, New Mexico, New York, Oklahoma and Texas. As of December 31, 2016, its Canadian Retail segment had 884 retail sites located in New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, Prince Edward Island and Quebec. As of December 31, 2016, its CrossAmerica segment had 1,187 distribution sites located in 29 states, which consisted of 403 independent dealer sites, 153 sites operated by Dunne Manning Stores LLC, 420 sites operated by lessee dealers, 95 commission sites, 73 CrossAmerica Partners LP Company-operated retail sites and 43 CST Company-operated retail sites.
About Ultrapar Participacoes
Ultrapar Participacoes SA is a Brazil-based company primarily engaged in the automotive fuel retail. The Company operates in five segments: Gas distribution (Ultragaz), which distributes liquefied petroleum gas (LPG) to residential, commercial and industrial consumers in the South, Southeast and Northeast regions of Brazil; Fuel distribution (Ipiranga), which operates the distribution and marketing of gasoline, ethanol, diesel, fuel oil, kerosene, natural gas for vehicles and lubricants, as well as provides related activities across the Brazilian territory; Chemicals (Oxiteno), which produces ethylene oxide, as well as its primary derivatives and fatty alcohols; Storage (Ultracargo), which operates liquid bulk terminals, primarily in the Southeast and Northeast regions of Brazil, and Drugstores (Extrafarma), which trades pharmaceutical, hygiene and beauty products through its drugstore chain in the states of Para and Piaui, among others.
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