Analyzing TravelCenters of America (TA) & Ultrapar Participacoes (UGP)
TravelCenters of America (NASDAQ: TA) and Ultrapar Participacoes (NYSE:UGP) are both retail/wholesale companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, institutional ownership, profitability, risk, earnings, analyst recommendations and valuation.
Insider and Institutional Ownership
34.1% of TravelCenters of America shares are held by institutional investors. Comparatively, 5.2% of Ultrapar Participacoes shares are held by institutional investors. 8.5% of TravelCenters of America shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
This is a breakdown of current recommendations and price targets for TravelCenters of America and Ultrapar Participacoes, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|TravelCenters of America||0||1||2||0||2.67|
TravelCenters of America presently has a consensus price target of $8.17, suggesting a potential upside of 85.61%. Given TravelCenters of America’s stronger consensus rating and higher possible upside, analysts plainly believe TravelCenters of America is more favorable than Ultrapar Participacoes.
This table compares TravelCenters of America and Ultrapar Participacoes’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|TravelCenters of America||0.40%||-1.79%||-0.59%|
Ultrapar Participacoes pays an annual dividend of $0.54 per share and has a dividend yield of 2.5%. TravelCenters of America does not pay a dividend. Ultrapar Participacoes pays out 59.3% of its earnings in the form of a dividend.
Valuation and Earnings
This table compares TravelCenters of America and Ultrapar Participacoes’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|TravelCenters of America||$5.51 billion||0.03||-$1.92 million||$0.59||7.46|
|Ultrapar Participacoes||$22.30 billion||0.55||$447.70 million||$0.91||24.07|
Ultrapar Participacoes has higher revenue and earnings than TravelCenters of America. TravelCenters of America is trading at a lower price-to-earnings ratio than Ultrapar Participacoes, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
TravelCenters of America has a beta of 2.36, meaning that its share price is 136% more volatile than the S&P 500. Comparatively, Ultrapar Participacoes has a beta of 1.05, meaning that its share price is 5% more volatile than the S&P 500.
Ultrapar Participacoes beats TravelCenters of America on 8 of the 15 factors compared between the two stocks.
TravelCenters of America Company Profile
TravelCenters of America LLC (TravelCenters) operates and franchises travel centers and convenience store and restaurant locations. The Company’s segments include travel centers, convenience stores, and corporate and other. The Company offers a range of products and services, including diesel fuel and gasoline, as well as nonfuel products and services, such as truck repair and maintenance services, full service restaurants, quick service restaurants (QSRs), travel/convenience stores and various customer amenities. Its customers include trucking fleets and their drivers, independent truck drivers, highway and local motorists, and casual diners. As of December 31, 2016, the Company’s business included 255 travel centers in 43 states in the United States primarily along the United States interstate highway system, and the province of Ontario, Canada. As of December 31, 2016, the Company’s business included 233 convenience stores in 11 states in the United States.
Ultrapar Participacoes Company Profile
Ultrapar Participacoes SA is a Brazil-based company primarily engaged in the automotive fuel retail. The Company operates in five segments: Gas distribution (Ultragaz), which distributes liquefied petroleum gas (LPG) to residential, commercial and industrial consumers in the South, Southeast and Northeast regions of Brazil; Fuel distribution (Ipiranga), which operates the distribution and marketing of gasoline, ethanol, diesel, fuel oil, kerosene, natural gas for vehicles and lubricants, as well as provides related activities across the Brazilian territory; Chemicals (Oxiteno), which produces ethylene oxide, as well as its primary derivatives and fatty alcohols; Storage (Ultracargo), which operates liquid bulk terminals, primarily in the Southeast and Northeast regions of Brazil, and Drugstores (Extrafarma), which trades pharmaceutical, hygiene and beauty products through its drugstore chain in the states of Para and Piaui, among others.
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