Financial Contrast: Western Refining (NYSE:WNR) and Alon USA Energy (ALJ)
Western Refining (NYSE: WNR) and Alon USA Energy (NYSE:ALJ) are both energy companies, but which is the better business? We will compare the two companies based on the strength of their dividends, valuation, earnings, analyst recommendations, profitability, institutional ownership and risk.
This table compares Western Refining and Alon USA Energy’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Alon USA Energy||0.89%||5.65%||1.96%|
This is a breakdown of current recommendations and price targets for Western Refining and Alon USA Energy, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Alon USA Energy||0||3||1||0||2.25|
Western Refining presently has a consensus price target of $30.75, suggesting a potential downside of 15.01%. Alon USA Energy has a consensus price target of $11.38, suggesting a potential downside of 14.60%. Given Alon USA Energy’s higher possible upside, analysts plainly believe Alon USA Energy is more favorable than Western Refining.
Volatility & Risk
Western Refining has a beta of 1.26, suggesting that its share price is 26% more volatile than the S&P 500. Comparatively, Alon USA Energy has a beta of 1.14, suggesting that its share price is 14% more volatile than the S&P 500.
Institutional & Insider Ownership
64.8% of Western Refining shares are owned by institutional investors. Comparatively, 49.5% of Alon USA Energy shares are owned by institutional investors. 26.5% of Western Refining shares are owned by company insiders. Comparatively, 8.8% of Alon USA Energy shares are owned 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.
Earnings & Valuation
This table compares Western Refining and Alon USA Energy’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Alon USA Energy||N/A||N/A||N/A||($0.56)||-23.79|
Alon USA Energy is trading at a lower price-to-earnings ratio than Western Refining, indicating that it is currently the more affordable of the two stocks.
Western Refining pays an annual dividend of $1.52 per share and has a dividend yield of 4.2%. Alon USA Energy pays an annual dividend of $0.60 per share and has a dividend yield of 4.5%. Western Refining pays out 100.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Alon USA Energy pays out -107.1% of its earnings in the form of a dividend. Western Refining has increased its dividend for 4 consecutive years and Alon USA Energy has increased its dividend for 4 consecutive years. Alon USA Energy is clearly the better dividend stock, given its higher yield and lower payout ratio.
Western Refining beats Alon USA Energy on 7 of the 12 factors compared between the two stocks.
About Western Refining
Western Refining, Inc. is an independent crude oil refiner and marketer of refined products. The Company operates through segments, including refining, Western Refining Logistics, LP (WNRL), retail and Other. As of December 31, 2016, the refining segment owned and operated three refineries that process crude oil and other feedstocks primarily into gasoline, diesel fuel, jet fuel and asphalt. The refining segment also sells refined products in the Mid-Atlantic region and Mexico. WNRL owns and operates terminal, storage, transportation and wholesale assets in the Southwest and terminal and storage assets in the Upper Great Plains region. The retail segment operates retail convenience stores and unmanned commercial fleet fueling (cardlock) locations located in the Southwest (Southwest Retail) and Upper Great Plains (SuperAmerica) regions. It markets refined products to a customer base, including wholesale distributors and retail chains.
About Alon USA Energy
Alon USA Energy, Inc. is an independent refiner and marketer of petroleum products, operating primarily in the South Central, Southwestern and Western regions of the United States. The Company’s segments include refining and marketing, asphalt and retail. Its refineries produce petroleum products, including various grades of gasoline, diesel, jet fuel, petrochemicals, petrochemical feedstocks, asphalt, and other petroleum-based products. As of December 31, 2016, it held interests in Alon USA Partners, LP, which owned a crude oil refinery in Big Spring, Texas, with a crude oil throughput capacity of 73,000 barrels per day and an integrated wholesale marketing business. In addition, it owned a crude oil refinery in Krotz Springs, Louisiana, with a crude oil throughput capacity of approximately 74,000 barrels per day (bpd), as of December 31, 2016. The Company also owns crude oil refineries in California. As of December 31, 2016, it operated approximately 300 convenience stores.
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