Critical Review: Crestwood Equity Partners (CEQP) and Alon USA Partners, (ALDW)
Crestwood Equity Partners (NYSE: CEQP) and Alon USA Partners, (NYSE:ALDW) are both small-cap oils/energy companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, analyst recommendations, profitability, dividends, institutional ownership, earnings and valuation.
Earnings and Valuation
This table compares Crestwood Equity Partners and Alon USA Partners,’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Crestwood Equity Partners||$3.06 billion||0.57||$311.60 million||($2.24)||-11.14|
|Alon USA Partners,||$2.04 billion||0.35||$136.33 million||$0.71||16.21|
Crestwood Equity Partners has higher revenue and earnings than Alon USA Partners,. Crestwood Equity Partners is trading at a lower price-to-earnings ratio than Alon USA Partners,, indicating that it is currently the more affordable of the two stocks.
Crestwood Equity Partners pays an annual dividend of $2.40 per share and has a dividend yield of 9.6%. Alon USA Partners, pays an annual dividend of $1.40 per share and has a dividend yield of 12.2%. Crestwood Equity Partners pays out -107.1% of its earnings in the form of a dividend. Alon USA Partners, pays out 197.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Crestwood Equity Partners has increased its dividend for 2 consecutive years.
This table compares Crestwood Equity Partners and Alon USA Partners,’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Crestwood Equity Partners||-4.68%||-1.13%||-0.49%|
|Alon USA Partners,||2.20%||40.06%||5.91%|
Risk & Volatility
Crestwood Equity Partners has a beta of 2.61, indicating that its stock price is 161% more volatile than the S&P 500. Comparatively, Alon USA Partners, has a beta of 1.05, indicating that its stock price is 5% more volatile than the S&P 500.
This is a summary of recent recommendations and price targets for Crestwood Equity Partners and Alon USA Partners,, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Crestwood Equity Partners||0||0||4||0||3.00|
|Alon USA Partners,||0||2||3||0||2.60|
Crestwood Equity Partners presently has a consensus price target of $28.00, indicating a potential upside of 12.22%. Alon USA Partners, has a consensus price target of $12.25, indicating a potential upside of 6.41%. Given Crestwood Equity Partners’ stronger consensus rating and higher possible upside, equities analysts clearly believe Crestwood Equity Partners is more favorable than Alon USA Partners,.
Insider and Institutional Ownership
65.2% of Crestwood Equity Partners shares are held by institutional investors. Comparatively, 5.3% of Alon USA Partners, shares are held by institutional investors. 36.2% of Crestwood Equity Partners shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Crestwood Equity Partners beats Alon USA Partners, on 11 of the 16 factors compared between the two stocks.
About Crestwood Equity Partners
Crestwood Equity Partners LP is a holding company and a master limited partnership (MLP). The Company develops, acquires, owns or controls, and operates assets and operations within the energy midstream sector. The Company’s segments include gathering and processing (G&P), which includes its natural gas, crude oil and produced water G&P operations; storage and transportation, which includes its natural gas and crude oil storage and transportation operations, and marketing, supply and logistics, which includes its natural gas liquid (NGL) supply and logistics business, crude oil storage and rail loading facilities and fleet, and salt production business. The Company provides infrastructure solutions to service natural gas and crude oil shale plays across the United States. It owns and operates a portfolio of crude oil and natural gas gathering, processing, storage and transportation assets. Its operating assets are owned by or through its subsidiary, Crestwood Midstream Partners LP.
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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