Critical Comparison: Phillips 66 (PSX) and Alon USA Partners, (NYSE:ALDW)
Phillips 66 (NYSE: PSX) and Alon USA Partners, (NYSE:ALDW) are both energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, institutional ownership, analyst recommendations, profitability, earnings, dividends and risk.
This table compares Phillips 66 and Alon USA Partners,’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Alon USA Partners,||2.20%||40.06%||5.91%|
Risk & Volatility
Phillips 66 has a beta of 1.22, meaning that its share price is 22% more volatile than the S&P 500. Comparatively, Alon USA Partners, has a beta of 1.06, meaning that its share price is 6% more volatile than the S&P 500.
Phillips 66 pays an annual dividend of $2.80 per share and has a dividend yield of 3.3%. Alon USA Partners, pays an annual dividend of $1.52 per share and has a dividend yield of 13.8%. Phillips 66 pays out 83.6% 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 Partners, pays out 214.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Phillips 66 has increased its dividend for 2 consecutive years and Alon USA Partners, has increased its dividend for 5 consecutive years. Alon USA Partners, is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This is a summary of current ratings and price targets for Phillips 66 and Alon USA Partners,, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Alon USA Partners,||0||2||3||0||2.60|
Phillips 66 currently has a consensus price target of $82.33, indicating a potential downside of 1.84%. Alon USA Partners, has a consensus price target of $12.25, indicating a potential upside of 11.16%. Given Alon USA Partners,’s stronger consensus rating and higher probable upside, analysts plainly believe Alon USA Partners, is more favorable than Phillips 66.
Institutional & Insider Ownership
69.6% of Phillips 66 shares are held by institutional investors. Comparatively, 7.0% of Alon USA Partners, shares are held by institutional investors. 0.5% of Phillips 66 shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Earnings and Valuation
This table compares Phillips 66 and Alon USA Partners,’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Phillips 66||$79.20 billion||0.54||$2.21 billion||$3.35||25.04|
|Alon USA Partners,||$2.04 billion||0.34||$136.33 million||$0.71||15.52|
Phillips 66 has higher revenue and earnings than Alon USA Partners,. Alon USA Partners, is trading at a lower price-to-earnings ratio than Phillips 66, indicating that it is currently the more affordable of the two stocks.
Phillips 66 beats Alon USA Partners, on 10 of the 16 factors compared between the two stocks.
About Phillips 66
Phillips 66 is an energy manufacturing and logistics company with midstream, chemicals, refining, and marketing and specialties businesses. The Company operates through four segments: Midstream, Chemicals, Refining, and Marketing and Specialties (M&S). The Midstream segment gathers, processes, transports and markets natural gas, and transports, stores, fractionates and markets natural gas liquids (NGLs) in the United States. The Chemicals segment consists of its equity investment in Chevron Phillips Chemical Company LLC (CPChem), which manufactures and markets petrochemicals and plastics. The Refining segment buys, sells and refines crude oil and other feedstocks at refineries in the United States and Europe. The M&S segment purchases for resale and markets refined petroleum products, such as gasolines, distillates and aviation fuels, primarily in the United States and Europe, as well as includes the manufacturing and marketing of specialty products, and power generation operations.
About Alon USA Partners,
Alon USA Partners, LP (Alon) is engaged principally in the business of operating a crude oil refinery in Big Spring, Texas. The Company had a crude oil throughput capacity of 73,000 barrels per day, which the Company referred to as its Big Spring refinery, as of December 31, 2016. The Company refines crude oil into finished products, which the Company markets primarily in Central and West Texas, Oklahoma, New Mexico and Arizona through its integrated wholesale distribution network to retail convenience stores and other third-party distributors. Its Big Spring refinery is located on 1,306 acres in the Permian Basin in West Texas. Major processes at its Big Spring refinery include fluid catalytic cracking, naphtha reforming, vacuum distillation, hydrotreating, aromatic extraction and alkylation. The Company is managed and operated by Alon USA Partners GP, LLC (General Partner), an indirect subsidiary of Alon USA Energy, Inc. (Alon Energy), which is its parent company.
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