Alon USA Partners (NYSE: ALDW) and NGL Energy Partners (NYSE:NGL) are both small-cap oil & gas refining and marketing – nec companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, valuation, analyst recommendations, profitability, dividends, institutional ownership and risk.

Valuation & Earnings

This table compares Alon USA Partners and NGL Energy Partners’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Alon USA Partners $1.81 billion 0.61 -$4.40 million $1.15 15.43
NGL Energy Partners $13.02 billion 0.14 $136.81 million ($2.10) -7.10

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

Institutional and Insider Ownership

5.3% of Alon USA Partners shares are owned by institutional investors. Comparatively, 63.8% of NGL Energy Partners shares are owned by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Volatility and Risk

Alon USA Partners has a beta of 1.18, meaning that its stock price is 18% more volatile than the S&P 500. Comparatively, NGL Energy Partners has a beta of 0.69, meaning that its stock price is 31% less volatile than the S&P 500.

Dividends

Alon USA Partners pays an annual dividend of $1.40 per share and has a dividend yield of 7.9%. NGL Energy Partners pays an annual dividend of $1.56 per share and has a dividend yield of 10.5%. Alon USA Partners pays out 121.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. NGL Energy Partners pays out -74.3% of its earnings in the form of a dividend. Alon USA Partners has raised its dividend for 3 consecutive years. NGL Energy Partners is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a summary of current ratings for Alon USA Partners and NGL Energy Partners, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Alon USA Partners 0 2 4 0 2.67
NGL Energy Partners 0 2 2 0 2.50

Alon USA Partners presently has a consensus price target of $12.25, indicating a potential downside of 30.99%. NGL Energy Partners has a consensus price target of $17.75, indicating a potential upside of 19.13%. Given NGL Energy Partners’ higher probable upside, analysts plainly believe NGL Energy Partners is more favorable than Alon USA Partners.

Profitability

This table compares Alon USA Partners and NGL Energy Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Alon USA Partners 3.47% 28.83% 7.77%
NGL Energy Partners -1.40% -4.60% -1.45%

Summary

Alon USA Partners beats NGL Energy Partners on 10 of the 16 factors compared between the two stocks.

Alon USA Partners Company Profile

Alon USA Partners, LP (Alon) is engaged principally in the business of operating a crude oil refinery in Big Spring, Texas. The Company had a crude oil throughput capacity of 73,000 barrels per day, which the Company referred to as its Big Spring refinery, as of December 31, 2016. The Company refines crude oil into finished products, which the Company markets primarily in Central and West Texas, Oklahoma, New Mexico and Arizona through its integrated wholesale distribution network to retail convenience stores and other third-party distributors. Its Big Spring refinery is located on 1,306 acres in the Permian Basin in West Texas. Major processes at its Big Spring refinery include fluid catalytic cracking, naphtha reforming, vacuum distillation, hydrotreating, aromatic extraction and alkylation. The Company is managed and operated by Alon USA Partners GP, LLC (General Partner), an indirect subsidiary of Alon USA Energy, Inc. (Alon Energy), which is its parent company.

NGL Energy Partners Company Profile

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.

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