Analyzing Valero Energy Partners (VLP) & Tallgrass Energy Partners, (TEP)
Valero Energy Partners (NYSE: VLP) and Tallgrass Energy Partners, (NYSE:TEP) are both mid-cap oils/energy companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, valuation, profitability, analyst recommendations, earnings, institutional ownership and dividends.
This table compares Valero Energy Partners and Tallgrass Energy Partners,’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Valero Energy Partners||55.29%||266.53%||22.74%|
|Tallgrass Energy Partners,||46.63%||20.47%||9.01%|
Earnings and Valuation
This table compares Valero Energy Partners and Tallgrass Energy Partners,’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Valero Energy Partners||$412.55 million||7.15||$298.24 million||$2.95||14.66|
|Tallgrass Energy Partners,||$614.20 million||5.44||$351.11 million||$2.23||20.50|
Tallgrass Energy Partners, has higher revenue and earnings than Valero Energy Partners. Valero Energy Partners is trading at a lower price-to-earnings ratio than Tallgrass Energy Partners,, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
29.9% of Valero Energy Partners shares are held by institutional investors. Comparatively, 62.1% of Tallgrass Energy Partners, shares are held by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Risk & Volatility
Valero Energy Partners has a beta of 0.74, suggesting that its share price is 26% less volatile than the S&P 500. Comparatively, Tallgrass Energy Partners, has a beta of 1.03, suggesting that its share price is 3% more volatile than the S&P 500.
This is a summary of recent ratings and recommmendations for Valero Energy Partners and Tallgrass Energy Partners,, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Valero Energy Partners||0||1||6||0||2.86|
|Tallgrass Energy Partners,||0||4||5||0||2.56|
Valero Energy Partners currently has a consensus price target of $53.43, suggesting a potential upside of 23.53%. Tallgrass Energy Partners, has a consensus price target of $61.38, suggesting a potential upside of 34.27%. Given Tallgrass Energy Partners,’s higher probable upside, analysts clearly believe Tallgrass Energy Partners, is more favorable than Valero Energy Partners.
Valero Energy Partners pays an annual dividend of $1.82 per share and has a dividend yield of 4.2%. Tallgrass Energy Partners, pays an annual dividend of $3.70 per share and has a dividend yield of 8.1%. Valero Energy Partners pays out 61.7% of its earnings in the form of a dividend. Tallgrass Energy Partners, pays out 165.9% 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 2 consecutive years and Tallgrass Energy Partners, has increased its dividend for 3 consecutive years. Tallgrass Energy Partners, is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
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 Tallgrass Energy Partners,
Tallgrass Energy Partners, LP owns, operates, acquires and develops midstream energy assets in North America. The Company operates through three segments: Crude Oil Transportation & Logistics, Natural Gas Transportation & Logistics and Processing & Logistics. The Crude Oil Transportation & Logistics segment includes the ownership and operation of a Federal Energy Regulatory Commission (FERC) crude oil pipeline system, and crude oil storage and terminaling facilities. The Natural Gas Transportation & Logistics segment is engaged in the ownership and operation of FERC regulated interstate natural gas pipelines and integrated natural gas storage facilities. The Processing & Logistics segment is engaged in the ownership and operation of natural gas processing, treating and fractionation facilities; the provision of water business services primarily to the oil and gas exploration and production industry, and the transportation of natural gas liquids (NGLs).
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