PBF Energy (NYSE: PBF) and Alon USA Partners (NYSE:ALDW) are both oils/energy companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, dividends, institutional ownership, earnings, valuation, profitability and analyst recommendations.
Institutional & Insider Ownership
5.3% of Alon USA Partners shares are held by institutional investors. 2.6% of PBF Energy shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
This table compares PBF Energy and Alon USA Partners’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|PBF Energy||$21.79 billion||0.16||$415.51 million||$3.69||8.28|
|Alon USA Partners||$1.81 billion||0.00||-$4.40 million||$1.15||N/A|
PBF Energy has higher revenue and earnings than Alon USA Partners. Alon USA Partners is trading at a lower price-to-earnings ratio than PBF Energy, indicating that it is currently the more affordable of the two stocks.
This is a summary of recent recommendations and price targets for PBF Energy and Alon USA Partners, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Alon USA Partners||0||3||3||0||2.50|
PBF Energy currently has a consensus target price of $33.89, indicating a potential upside of 10.86%. Alon USA Partners has a consensus target price of $12.25, indicating a potential upside of Infinity. Given Alon USA Partners’ stronger consensus rating and higher probable upside, analysts clearly believe Alon USA Partners is more favorable than PBF Energy.
This table compares PBF Energy and Alon USA Partners’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Alon USA Partners||5.90%||30.17%||10.26%|
PBF Energy pays an annual dividend of $1.20 per share and has a dividend yield of 3.9%. Alon USA Partners pays an annual dividend of $0.84 per share. PBF Energy pays out 32.5% of its earnings in the form of a dividend. Alon USA Partners pays out 73.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. PBF Energy has raised its dividend for 3 consecutive years. PBF Energy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Risk & Volatility
PBF Energy has a beta of 1.24, meaning that its share price is 24% more volatile than the S&P 500. Comparatively, Alon USA Partners has a beta of 1.19, meaning that its share price is 19% more volatile than the S&P 500.
PBF Energy beats Alon USA Partners on 9 of the 16 factors compared between the two stocks.
About PBF Energy
PBF Energy Inc. (PBF Energy) is a holding company. The Company is an independent petroleum refiner and supplier of unbranded transportation fuels, heating oil, petrochemical feedstocks, lubricants and other petroleum products in the United States. The Company operates through two segments: Refining and Logistics. It sells its products throughout the Northeast, Midwest, Gulf Coast and West Coast of the United States, as well as in other regions of the United States and Canada, and ships products to other international destinations. As of December 31, 2016, it owned and operated five domestic oil refineries and related assets. As of December 31, 2016, its refineries had a combined processing capacity, known as throughput, of approximately 900,000 barrels per day (bpd) and a weighted-average Nelson Complexity Index of approximately 12.2. As of December 31, 2016, the Company owned and operated five refineries providing geographic and market diversity.
About Alon USA Partners
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.
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