Financial Analysis: Valero Energy Corporation (VLO) versus Ngl Energy Partners Lp (NGL)
Valero Energy Corporation (NYSE: VLO) and Ngl Energy Partners Lp (NYSE:NGL) are both oil & gas refining and marketing – nec companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, risk, earnings, valuation, analyst recommendations, institutional ownership and profitability.
Earnings and Valuation
This table compares Valero Energy Corporation and Ngl Energy Partners Lp’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Valero Energy Corporation||$75.66 billion||0.48||$2.29 billion||$4.61||17.98|
|Ngl Energy Partners Lp||$13.02 billion||0.11||$136.81 million||($2.10)||-5.69|
This table compares Valero Energy Corporation and Ngl Energy Partners Lp’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Valero Energy Corporation||2.33%||9.87%||4.43%|
|Ngl Energy Partners Lp||-1.40%||-4.60%||-1.45%|
Valero Energy Corporation pays an annual dividend of $2.80 per share and has a dividend yield of 3.4%. Ngl Energy Partners Lp pays an annual dividend of $1.56 per share and has a dividend yield of 13.1%. Valero Energy Corporation pays out 60.7% of its earnings in the form of a dividend. Ngl Energy Partners Lp pays out -74.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Valero Energy Corporation has increased its dividend for 6 consecutive years. Ngl Energy Partners Lp is clearly the better dividend stock, given its higher yield and lower payout ratio.
Insider & Institutional Ownership
80.8% of Valero Energy Corporation shares are owned by institutional investors. Comparatively, 61.2% of Ngl Energy Partners Lp shares are owned by institutional investors. 0.5% of Valero Energy Corporation shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
This is a summary of recent recommendations for Valero Energy Corporation and Ngl Energy Partners Lp, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Valero Energy Corporation||0||10||9||0||2.47|
|Ngl Energy Partners Lp||0||2||3||0||2.60|
Valero Energy Corporation presently has a consensus price target of $79.06, suggesting a potential downside of 4.61%. Ngl Energy Partners Lp has a consensus price target of $18.20, suggesting a potential upside of 52.30%. Given Ngl Energy Partners Lp’s stronger consensus rating and higher probable upside, analysts plainly believe Ngl Energy Partners Lp is more favorable than Valero Energy Corporation.
Risk and Volatility
Valero Energy Corporation has a beta of 1.17, indicating that its stock price is 17% more volatile than the S&P 500. Comparatively, Ngl Energy Partners Lp has a beta of 0.67, indicating that its stock price is 33% less volatile than the S&P 500.
Valero Energy Corporation beats Ngl Energy Partners Lp on 12 of the 16 factors compared between the two stocks.
About Valero Energy Corporation
Valero Energy Corporation (Valero) is an independent petroleum refiner and ethanol producer. The Company’s segments include refining, ethanol and Valero Energy Partners LP (VLP). The refining segment includes its refining operations and the associated marketing activities. The ethanol segment includes its ethanol operations and the associated marketing activities, and logistics assets that support its ethanol operations. The Company owns logistics assets (crude oil pipelines, refined petroleum product pipelines, terminals, tanks, marine docks, truck rack bays and other assets) that support its refining operations. Some of these assets are owned by VLP, which is a midstream master limited partnership owned by the Company. VLP’s assets include crude oil and refined petroleum products pipeline and terminal systems in the United States Gulf Coast and the United States Mid-Continent regions. Its refineries produce conventional gasolines, premium gasolines and lubricants, among others.
About Ngl Energy Partners Lp
NGL Energy Partners LP owns and operates a vertically integrated energy business. The Company’s segments are crude oil logistics, water solutions, liquids, retail propane, refined products and renewables, and corporate and other. Its crude oil logistics segment includes owned and leased crude oil storage terminals, and owned and leased pipeline injection stations. Its water solutions segment provides services for the treatment and disposal of wastewater generated from crude oil and natural gas production, and for the disposal of solids, such as tank bottoms and drilling fluids. Its liquids segment supplies natural gas liquids to retailers, wholesalers, refiners and petrochemical plants throughout the United States and in Canada. Its retail propane segment consists of the retail marketing, and sale and distribution of propane and distillates, among others. The Company’s refined products and renewables segment is engaged in gasoline, diesel, ethanol and biodiesel marketing operations.
Receive News & Ratings for Valero Energy Corporation Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Valero Energy Corporation and related companies with MarketBeat.com's FREE daily email newsletter.