Western Refining Logistics (NYSE: WNRL) and QEP Midstream Partners (NYSE:QEPM) are both small-cap oil & gas transportation services – nec companies, but which is the better investment? We will compare the two businesses based on the strength of their valuation, risk, analyst recommendations, profitability, institutional ownership, dividends and earnings.

Institutional & Insider Ownership

40.1% of Western Refining Logistics shares are held by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Dividends

Western Refining Logistics pays an annual dividend of $1.87 per share and has a dividend yield of 7.8%. QEP Midstream Partners does not pay a dividend. Western Refining Logistics pays out 174.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Western Refining Logistics has increased its dividend for 3 consecutive years and QEP Midstream Partners has increased its dividend for 2 consecutive years.

Analyst Recommendations

This is a summary of current ratings for Western Refining Logistics and QEP Midstream Partners, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Western Refining Logistics 0 1 0 0 2.00
QEP Midstream Partners 0 0 0 0 N/A

Valuation & Earnings

This table compares Western Refining Logistics and QEP Midstream Partners’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Western Refining Logistics N/A N/A N/A $1.07 22.29
QEP Midstream Partners N/A N/A N/A $1.11 14.50

QEP Midstream Partners is trading at a lower price-to-earnings ratio than Western Refining Logistics, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Western Refining Logistics and QEP Midstream Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Western Refining Logistics 3.05% 78.84% 12.72%
QEP Midstream Partners 62.86% 23.46% 13.76%

Western Refining Logistics Company Profile

Western Refining Logistics, LP owns, operates, develops, and acquires logistics and related assets and businesses to include terminals, storage tanks, pipelines and other logistics assets related to the terminaling, transportation, storage and distribution of crude oil and refined products. The Company’s segments include logistics and wholesale. The Company operates its logistics business and wholesale business under commercial and service agreements with Western Refining, Inc. (Western). Its logistics assets consist of pipeline and gathering infrastructure and terminalling, transportation and storage assets in the Southwest and the Upper Great Plains region. Its wholesale business purchases its petroleum fuels from Western, and its lubricants and additional petroleum fuels from third-party suppliers.

QEP Midstream Partners Company Profile

QEP Midstream Partners, LP (QEP Midstream) is a master limited partnership formed to own, operate, acquire and develop midstream energy assets. The Company’s primary assets consist of ownership interests in four gathering systems and two Federal Energy Regulatory Commission (FERC)-regulated pipelines through which, the Company provides natural gas midstream services, and crude oil gathering and transportation services to producers and users of natural gas and crude oil. The natural gas midstream services include gathering, compression, treating and dehydration, processing, fractionation, natural gas transmission and natural gas liquids (NGL) products transportation. The Company provides crude oil gathering and transportation services in Colorado, North Dakota, Utah and Wyoming.

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