Alon USA Partners, (NYSE: ALDW) and Targa Resources Partners (NYSE:NGLS) are both small-cap oils/energy companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, earnings, profitability, institutional ownership, valuation and analyst recommendations.
Insider & Institutional Ownership
5.3% of Alon USA Partners, shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
This table compares Alon USA Partners, and Targa Resources Partners’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Alon USA Partners,||2.20%||40.06%||5.91%|
|Targa Resources Partners||3.27%||0.29%||1.61%|
Valuation & Earnings
This table compares Alon USA Partners, and Targa Resources Partners’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Alon USA Partners,||$2.04 billion||0.35||$136.33 million||$0.71||15.99|
|Targa Resources Partners||N/A||N/A||N/A||N/A||N/A|
Alon USA Partners, has higher revenue and earnings than Targa Resources Partners.
This is a summary of current recommendations and price targets for Alon USA Partners, and Targa Resources Partners, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Alon USA Partners,||0||2||3||0||2.60|
|Targa Resources Partners||0||1||3||0||2.75|
Alon USA Partners, currently has a consensus price target of $12.25, indicating a potential upside of 7.93%. Targa Resources Partners has a consensus price target of $52.75, indicating a potential upside of 395.31%. Given Targa Resources Partners’ stronger consensus rating and higher probable upside, analysts plainly believe Targa Resources Partners is more favorable than Alon USA Partners,.
Alon USA Partners, pays an annual dividend of $1.40 per share and has a dividend yield of 12.3%. Targa Resources Partners does not pay a dividend. Alon USA Partners, pays out 197.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Alon USA Partners, has increased its dividend for 2 consecutive years and Targa Resources Partners has increased its dividend for 7 consecutive years.
Alon USA Partners, beats Targa Resources Partners on 6 of the 11 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.
Targa Resources Partners Company Profile
Targa Resources Partners LP is a provider of midstream natural gas and natural gas liquid (NGL) services in the United States with a presence in crude oil gathering and petroleum terminaling. The Company is engaged in the business of gathering, compressing, treating, processing and selling natural gas; storing, fractionating, treating, transporting and selling NGLs and NGL products, including services to liquefied petroleum gas (LPG) exporters; gathering, storing and terminaling crude oil, and storing, terminaling and selling refined petroleum products. The Company operates in two divisions: Gathering and Processing, and Logistics and Marketing. The Gathering and Processing division consists of two segments: Field Gathering and Processing, and Coastal Gathering and Processing. The Logistics and Marketing division consists of two segments: Logistics Assets and Marketing and Distribution.
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