Critical Analysis: World Point Terminals (WPT) versus Blueknight Energy Partners (BKEP)

World Point Terminals (NYSE: WPT) and Blueknight Energy Partners (NASDAQ:BKEP) are both small-cap energy companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, valuation, dividends, earnings and risk.

Volatility and Risk

World Point Terminals has a beta of 0.44, suggesting that its stock price is 56% less volatile than the S&P 500. Comparatively, Blueknight Energy Partners has a beta of 0.86, suggesting that its stock price is 14% less volatile than the S&P 500.

Profitability

This table compares World Point Terminals and Blueknight Energy Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
World Point Terminals 37.15% 19.57% 18.37%
Blueknight Energy Partners 11.78% -10.32% 6.85%

Dividends

World Point Terminals pays an annual dividend of $1.20 per share and has a dividend yield of 6.9%. Blueknight Energy Partners pays an annual dividend of $0.58 per share and has a dividend yield of 10.9%. World Point Terminals pays out 115.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Blueknight Energy Partners pays out -322.2% of its earnings in the form of a dividend. Blueknight Energy Partners is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of recent ratings and price targets for World Point Terminals and Blueknight Energy Partners, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
World Point Terminals 0 2 0 0 2.00
Blueknight Energy Partners 0 1 1 0 2.50

World Point Terminals currently has a consensus price target of $17.00, indicating a potential downside of 1.68%. Blueknight Energy Partners has a consensus price target of $7.00, indicating a potential upside of 32.08%. Given Blueknight Energy Partners’ stronger consensus rating and higher probable upside, analysts plainly believe Blueknight Energy Partners is more favorable than World Point Terminals.

Institutional & Insider Ownership

13.2% of World Point Terminals shares are owned by institutional investors. Comparatively, 56.5% of Blueknight Energy Partners shares are owned by institutional investors. 1.7% of Blueknight Energy Partners shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation & Earnings

This table compares World Point Terminals and Blueknight Energy Partners’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
World Point Terminals N/A N/A N/A $1.04 16.63
Blueknight Energy Partners $177.39 million 1.14 -$4.84 million ($0.18) -29.44

World Point Terminals has higher earnings, but lower revenue than Blueknight Energy Partners. Blueknight Energy Partners is trading at a lower price-to-earnings ratio than World Point Terminals, indicating that it is currently the more affordable of the two stocks.

Summary

Blueknight Energy Partners beats World Point Terminals on 9 of the 13 factors compared between the two stocks.

World Point Terminals Company Profile

World Point Terminals, LP owns, operates, develops and acquires liquid bulk storage terminals and other assets relating to the storage of petroleum products, including light refined products, heavy refined products and crude oil. The Company operates fee-based facilities located along the East Coast, Gulf Coast and Midwest regions of the United States. As of December 31, 2016, through its subsidiary, Center Point Terminal Company, LLC (Center Point), the Company owned and operated 15.6 million barrels of tankage at terminals, which are located in the East Coast, Gulf Coast and Midwest regions of the United States. The Company’s terminal facilities are located on waterways, providing ship or barge access for the movement of petroleum products, and have truck racks with loading logistics. Its terminal facilities also have rail or pipeline access.

Blueknight Energy Partners Company Profile

Blueknight Energy Partners, L.P. is a master limited partnership company. The Company manages its operations through four segments: asphalt terminaling services, crude oil terminaling and storage services, crude oil pipeline services, and crude oil trucking and producer field services. Asphalt terminaling services segment operations generally consist of fee based activities associated with providing storage, terminaling and throughput services for asphalt product and residual fuel oil. Crude oil terminaling and storage segment operations generally consist of fee based activities associated with providing storage, terminaling, and throughput services for crude oil. Crude oil pipeline services segment operations generally consist of fee-based activity associated with transporting crude oil products on pipelines. Crude oil trucking and producer field services segment operations generally consist of fee-based activity associated with transporting crude oil products on trucks.

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