QEP Midstream Partners (NYSE: QEPM) and Valero Energy Partners (NYSE:VLP) are both energy companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, earnings, institutional ownership, profitability, dividends, valuation and risk.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for QEP Midstream Partners and Valero Energy Partners, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
QEP Midstream Partners 0 0 0 0 N/A
Valero Energy Partners 0 2 6 0 2.75

Valero Energy Partners has a consensus target price of $53.14, suggesting a potential upside of 28.92%. Given Valero Energy Partners’ higher possible upside, analysts clearly believe Valero Energy Partners is more favorable than QEP Midstream Partners.

Profitability

This table compares QEP Midstream Partners and Valero Energy Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
QEP Midstream Partners 62.86% 23.46% 13.76%
Valero Energy Partners 54.43% 184.08% 22.28%

Dividends

Valero Energy Partners pays an annual dividend of $1.92 per share and has a dividend yield of 4.7%. QEP Midstream Partners does not pay a dividend. Valero Energy Partners pays out 67.8% of its earnings in the form of a dividend. QEP Midstream Partners has raised its dividend for 2 consecutive years and Valero Energy Partners has raised its dividend for 3 consecutive years.

Institutional and Insider Ownership

29.2% of Valero Energy Partners shares are owned by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares QEP Midstream Partners and Valero Energy Partners’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
QEP Midstream Partners N/A N/A N/A $1.11 14.50
Valero Energy Partners $362.62 million 8.03 $188.83 million $2.83 14.57

Valero Energy Partners has higher revenue and earnings than QEP Midstream Partners. QEP Midstream Partners is trading at a lower price-to-earnings ratio than Valero Energy Partners, indicating that it is currently the more affordable of the two stocks.

Summary

Valero Energy Partners beats QEP Midstream Partners on 9 of the 11 factors compared between the two stocks.

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.

Valero Energy Partners Company Profile

Valero Energy Partners LP owns, operates, develops and acquires crude oil and refined petroleum products pipelines, terminals, and other transportation and logistics assets. The Company’s assets include crude oil and refined petroleum products pipelines, terminals, and other logistics assets in the United States Gulf Coast and the United States Mid-Continent regions that are integral to the operations of the ten of Valero Energy Corporation (Valero) refineries. It provides assets and services, such as Port Arthur logistics system, McKee logistics system, Memphis logistics system, Three Rivers logistics system, Ardmore logistics system, Houston logistics system, St. Charles logistics system, Corpus Christi logistics system and Meraux logistics system. Port Arthur logistics system includes its Lucas crude system and its Port Arthur products system. McKee logistics system is a crude oil and refined petroleum products pipeline and terminal system supporting Valero’s McKee Refinery.

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