Delek Logistics Partners, L.P. (NYSE: DKL) and Teekay Offshore Partners L.P. (NYSE:TOO) are both small-cap oils/energy companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, valuation, profitability, institutional ownership, risk, analyst recommendations and earnings.

Analyst Recommendations

This is a breakdown of current ratings for Delek Logistics Partners, L.P. and Teekay Offshore Partners L.P., as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Delek Logistics Partners, L.P. 0 2 1 0 2.33
Teekay Offshore Partners L.P. 1 1 3 0 2.40

Delek Logistics Partners, L.P. presently has a consensus target price of $33.50, indicating a potential upside of 7.89%. Teekay Offshore Partners L.P. has a consensus target price of $4.67, indicating a potential upside of 83.01%. Given Teekay Offshore Partners L.P.’s stronger consensus rating and higher probable upside, analysts clearly believe Teekay Offshore Partners L.P. is more favorable than Delek Logistics Partners, L.P..

Dividends

Delek Logistics Partners, L.P. pays an annual dividend of $2.82 per share and has a dividend yield of 9.1%. Teekay Offshore Partners L.P. pays an annual dividend of $0.04 per share and has a dividend yield of 1.6%. Delek Logistics Partners, L.P. pays out 148.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Teekay Offshore Partners L.P. pays out 8.2% of its earnings in the form of a dividend. Delek Logistics Partners, L.P. has increased its dividend for 3 consecutive years. Delek Logistics Partners, L.P. is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Delek Logistics Partners, L.P. and Teekay Offshore Partners L.P.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Delek Logistics Partners, L.P. 12.70% -368.38% 15.15%
Teekay Offshore Partners L.P. 11.51% 5.24% 0.78%

Insider & Institutional Ownership

28.8% of Delek Logistics Partners, L.P. shares are held by institutional investors. Comparatively, 48.4% of Teekay Offshore Partners L.P. shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Risk and Volatility

Delek Logistics Partners, L.P. has a beta of 1.3, meaning that its stock price is 30% more volatile than the S&P 500. Comparatively, Teekay Offshore Partners L.P. has a beta of 2.76, meaning that its stock price is 176% more volatile than the S&P 500.

Valuation & Earnings

This table compares Delek Logistics Partners, L.P. and Teekay Offshore Partners L.P.’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Delek Logistics Partners, L.P. $488.39 million 1.55 $100.26 million $1.90 16.34
Teekay Offshore Partners L.P. $1.10 billion 0.36 $495.18 million $0.49 5.20

Teekay Offshore Partners L.P. has higher revenue and earnings than Delek Logistics Partners, L.P.. Teekay Offshore Partners L.P. is trading at a lower price-to-earnings ratio than Delek Logistics Partners, L.P., indicating that it is currently the more affordable of the two stocks.

Summary

Teekay Offshore Partners L.P. beats Delek Logistics Partners, L.P. on 9 of the 16 factors compared between the two stocks.

Delek Logistics Partners, L.P. Company Profile

Delek Logistics Partners, LP owns and operates logistics and marketing assets for crude oil, and intermediate and refined products. The Company’s business primarily consists of certain crude oil, intermediate and refined products pipelines and transportation, storage, wholesale marketing, terminaling and offloading assets, which were previously owned, operated or held by Delek US Holdings, Inc. (Delek), and assets acquired from unrelated third parties. The Company operates through two segments: Pipelines and Transportation segment, and Wholesale Marketing and Terminalling segment. The Company engaged in the gathering, transporting and storing crude oil; storing intermediate products and feed stocks, and marketing, distributing, transporting, offloading and storing refined products. The Company also provides crude oil, intermediate and refined products transportation services for terminaling, and marketing services to third parties primarily in Texas, Tennessee and Arkansas.

Teekay Offshore Partners L.P. Company Profile

Teekay Offshore Partners L.P. is a provider of marine transportation, oil production, storage, long-distance towing and offshore installation and maintenance and safety services to the offshore oil industry in North Sea, Brazil and the East Coast of Canada. The Company operates shuttle tankers; towage vessels; floating, production, storage and off-loading (FPSO) units; floating storage and off-take (FSO) units; units for maintenance and safety (UMS); long-distance towing and offshore installation vessels, and conventional crude oil tankers. Its segments include shuttle tanker segment, FPSO segment, FSO segment, conventional tanker segment, towage segment and UMS segment. Its fleet consists of over 30 shuttle tankers, such as over three chartered-in vessels and a HiLoad Dynamic Positioning unit, over six FPSO units, approximately seven FSO units, over six long-distance towing and offshore installation vessels, a UMS and over two conventional oil tankers.

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