Valero Energy Partners (NYSE: VLP) and Delek Logistics Partners (NYSE:DKL) are both energy companies, but which is the better investment? We will compare the two businesses based on the strength of their valuation, risk, earnings, profitability, analyst recommendations, institutional ownership and dividends.

Profitability

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

Net Margins Return on Equity Return on Assets
Valero Energy Partners 54.43% 184.08% 22.28%
Delek Logistics Partners 12.86% -332.86% 15.79%

Earnings and Valuation

This table compares Valero Energy Partners and Delek Logistics Partners’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Valero Energy Partners $362.62 million 9.10 $188.83 million $2.83 16.50
Delek Logistics Partners $448.06 million 1.80 $62.80 million $1.99 16.33

Valero Energy Partners has higher earnings, but lower revenue than Delek Logistics Partners. Delek Logistics 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.

Dividends

Valero Energy Partners pays an annual dividend of $1.92 per share and has a dividend yield of 4.1%. Delek Logistics Partners pays an annual dividend of $2.86 per share and has a dividend yield of 8.8%. Valero Energy Partners pays out 67.8% of its earnings in the form of a dividend. Delek Logistics Partners pays out 143.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Valero Energy Partners has increased its dividend for 4 consecutive years and Delek Logistics Partners has increased its dividend for 3 consecutive years.

Risk & Volatility

Valero Energy Partners has a beta of 0.69, suggesting that its stock price is 31% less volatile than the S&P 500. Comparatively, Delek Logistics Partners has a beta of 1.25, suggesting that its stock price is 25% more volatile than the S&P 500.

Institutional and Insider Ownership

29.3% of Valero Energy Partners shares are owned by institutional investors. Comparatively, 25.1% of Delek Logistics Partners shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Valero Energy Partners and Delek Logistics Partners, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Valero Energy Partners 0 2 6 0 2.75
Delek Logistics Partners 0 2 0 0 2.00

Valero Energy Partners presently has a consensus price target of $52.57, suggesting a potential upside of 12.60%. Delek Logistics Partners has a consensus price target of $32.50, suggesting a potential upside of 0.00%. Given Valero Energy Partners’ stronger consensus rating and higher probable upside, equities analysts plainly believe Valero Energy Partners is more favorable than Delek Logistics Partners.

Summary

Valero Energy Partners beats Delek Logistics Partners on 13 of the 16 factors compared between the two stocks.

About Valero Energy Partners

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.

About Delek Logistics Partners

Delek Logistics Partners, LP owns and operates logistics and marketing assets for crude oil, and intermediate and refined products. The Company’s business primarily consists of certain crude oil, intermediate and refined products pipelines and transportation, storage, wholesale marketing, terminaling and offloading assets, which were previously owned, operated or held by Delek US Holdings, Inc. (Delek), and assets acquired from unrelated third parties. The Company operates through two segments: Pipelines and Transportation segment, and Wholesale Marketing and Terminalling segment. The Company engaged in the gathering, transporting and storing crude oil; storing intermediate products and feed stocks, and marketing, distributing, transporting, offloading and storing refined products. The Company also provides crude oil, intermediate and refined products transportation services for terminaling, and marketing services to third parties primarily in Texas, Tennessee and Arkansas.

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