Shell Midstream Partners, L.P. (NYSE: SHLX) and World Point Terminals (NYSE:WPT) are both oils/energy companies, but which is the better investment? We will compare the two businesses based on the strength of their institutional ownership, dividends, valuation, risk, profitability, earnings and analyst recommendations.

Analyst Recommendations

This is a breakdown of current ratings for Shell Midstream Partners, L.P. and World Point Terminals, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Shell Midstream Partners, L.P. 0 1 4 0 2.80
World Point Terminals 0 2 0 0 2.00

Shell Midstream Partners, L.P. currently has a consensus target price of $34.80, indicating a potential upside of 24.20%. World Point Terminals has a consensus target price of $17.00, indicating a potential downside of 1.68%. Given Shell Midstream Partners, L.P.’s stronger consensus rating and higher probable upside, analysts plainly believe Shell Midstream Partners, L.P. is more favorable than World Point Terminals.

Earnings & Valuation

This table compares Shell Midstream Partners, L.P. and World Point Terminals’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Shell Midstream Partners, L.P. $283.50 million 17.53 $160.60 million $1.24 22.60
World Point Terminals N/A N/A N/A $1.03 16.79

Shell Midstream Partners, L.P. has higher revenue and earnings than World Point Terminals. World Point Terminals is trading at a lower price-to-earnings ratio than Shell Midstream Partners, L.P., indicating that it is currently the more affordable of the two stocks.

Dividends

Shell Midstream Partners, L.P. pays an annual dividend of $1.22 per share and has a dividend yield of 4.4%. World Point Terminals pays an annual dividend of $1.20 per share and has a dividend yield of 6.9%. Shell Midstream Partners, L.P. pays out 98.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. World Point Terminals pays out 116.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Institutional and Insider Ownership

43.8% of Shell Midstream Partners, L.P. shares are held by institutional investors. Comparatively, 13.2% of World Point Terminals shares are held by institutional investors. 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.

Volatility & Risk

Shell Midstream Partners, L.P. has a beta of 1.17, suggesting that its share price is 17% more volatile than the S&P 500. Comparatively, World Point Terminals has a beta of 0.43, suggesting that its share price is 57% less volatile than the S&P 500.

Profitability

This table compares Shell Midstream Partners, L.P. and World Point Terminals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Shell Midstream Partners, L.P. 87.22% 258.67% 28.64%
World Point Terminals 37.15% 19.57% 18.37%

Summary

Shell Midstream Partners, L.P. beats World Point Terminals on 11 of the 12 factors compared between the two stocks.

About Shell Midstream Partners, L.P.

Shell Midstream Partners, L.P. is a master limited partnership company, which owns, operates, develops and acquires pipelines and other midstream assets. The Company conducts its operations through its subsidiary, Shell Midstream Operating, LLC. Its assets consist of interests in entities that own crude oil and refined products pipelines serving as key infrastructure to transport onshore and offshore crude oil production to Gulf Coast and Midwest refining markets and to deliver refined products from those markets to demand centers. As of December 31, 2016, it owned interests in seven crude oil pipeline systems, three refined products systems, one natural gas gathering pipeline system and a crude tank storage and terminal system. Its pipeline and terminal systems include Zydeco crude oil system, Auger crude oil system, Mars crude oil system, Bengal product system, Poseidon crude oil system, Odyssey crude oil system, Proteus crude oil system and Endymion crude oil system.

About World Point Terminals

World Point Terminals, LP owns, operates, develops and acquires liquid bulk storage terminals and other assets relating to the storage of petroleum products, including light refined products, heavy refined products and crude oil. The Company operates fee-based facilities located along the East Coast, Gulf Coast and Midwest regions of the United States. As of December 31, 2016, through its subsidiary, Center Point Terminal Company, LLC (Center Point), the Company owned and operated 15.6 million barrels of tankage at terminals, which are located in the East Coast, Gulf Coast and Midwest regions of the United States. The Company’s terminal facilities are located on waterways, providing ship or barge access for the movement of petroleum products, and have truck racks with loading logistics. Its terminal facilities also have rail or pipeline access.

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