Holly Energy Partners (HEP) vs. The Competition Head to Head Review

Holly Energy Partners (NYSE: HEP) is one of 21 publicly-traded companies in the “Pipelines, except natural gas” industry, but how does it weigh in compared to its rivals? We will compare Holly Energy Partners to similar companies based on the strength of its earnings, dividends, risk, valuation, analyst recommendations, profitability and institutional ownership.

Institutional and Insider Ownership

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28.8% of Holly Energy Partners shares are held by institutional investors. Comparatively, 57.0% of shares of all “Pipelines, except natural gas” companies are held by institutional investors. 0.8% of Holly Energy Partners shares are held by company insiders. Comparatively, 5.9% of shares of all “Pipelines, except natural gas” companies are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Risk & Volatility

Holly Energy Partners has a beta of 0.8, meaning that its stock price is 20% less volatile than the S&P 500. Comparatively, Holly Energy Partners’ rivals have a beta of 1.07, meaning that their average stock price is 7% more volatile than the S&P 500.

Dividends

Holly Energy Partners pays an annual dividend of $2.60 per share and has a dividend yield of 8.9%. Holly Energy Partners pays out 147.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Pipelines, except natural gas” companies pay a dividend yield of 7.9% and pay out 134.2% of their earnings in the form of a dividend. Holly Energy Partners has raised its dividend for 14 consecutive years.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Holly Energy Partners and its rivals, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Holly Energy Partners 4 5 0 0 1.56
Holly Energy Partners Competitors 214 975 1035 28 2.39

Holly Energy Partners currently has a consensus price target of $31.44, suggesting a potential upside of 8.13%. As a group, “Pipelines, except natural gas” companies have a potential upside of 23.02%. Given Holly Energy Partners’ rivals stronger consensus rating and higher possible upside, analysts plainly believe Holly Energy Partners has less favorable growth aspects than its rivals.

Earnings & Valuation

This table compares Holly Energy Partners and its rivals top-line revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Holly Energy Partners $454.36 million $195.04 million 16.52
Holly Energy Partners Competitors $6.57 billion $435.72 million 19.04

Holly Energy Partners’ rivals have higher revenue and earnings than Holly Energy Partners. Holly Energy Partners is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Profitability

This table compares Holly Energy Partners and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Holly Energy Partners 42.93% 35.81% 8.81%
Holly Energy Partners Competitors 31.87% -1.27% 9.40%

Summary

Holly Energy Partners rivals beat Holly Energy Partners on 12 of the 15 factors compared.

About Holly Energy Partners

Holly Energy Partners, L.P., (HEP) is engaged in the business of operating a system of petroleum product and crude pipelines, storage tanks, distribution terminals, loading rack facilities and refinery processing units in West Texas, New Mexico, Utah, Nevada, Oklahoma, Wyoming, Kansas, Arizona, Idaho and Washington. The Company operates through segments, including pipelines and terminals segment and a refinery processing unit segment. As of December 31, 2016, its pipelines and terminals segment consisted of 24 main pipeline segments; Crude gathering networks in Texas and New Mexico; 10 refined product terminals; one crude terminal; 8,300 track feet of rail storage located at one facility; seven locations with truck and/or rail racks, and Tankage at all six of HollyFrontier Corporation’s (HFC’s) refining facility locations. As of December 31, 2016, the Company’s refinery processing unit segment consisted of five refinery processing units at two of HFC’s refining facility locations.

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