World Point Terminals (NYSE: WPT) and Phillips 66 Partners (NYSE:PSXP) are both energy companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, profitability, valuation, risk, institutional ownership, earnings and analyst recommendations.

Risk and Volatility

World Point Terminals has a beta of 0.43, indicating that its stock price is 57% less volatile than the S&P 500. Comparatively, Phillips 66 Partners has a beta of 1.52, indicating that its stock price is 52% more volatile than the S&P 500.

Earnings & Valuation

This table compares World Point Terminals and Phillips 66 Partners’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
World Point Terminals N/A N/A N/A $1.03 16.79
Phillips 66 Partners $781.00 million 6.67 $461.00 million $2.43 19.40

Phillips 66 Partners has higher revenue and earnings than World Point Terminals. World Point Terminals is trading at a lower price-to-earnings ratio than Phillips 66 Partners, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares World Point Terminals and Phillips 66 Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
World Point Terminals 37.15% 19.57% 18.37%
Phillips 66 Partners 45.35% 23.01% 9.97%

Institutional and Insider Ownership

13.2% of World Point Terminals shares are held by institutional investors. Comparatively, 43.0% of Phillips 66 Partners shares are held by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Dividends

World Point Terminals pays an annual dividend of $1.20 per share and has a dividend yield of 6.9%. Phillips 66 Partners pays an annual dividend of $2.46 per share and has a dividend yield of 5.2%. World Point Terminals pays out 116.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Phillips 66 Partners pays out 101.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. World Point Terminals has raised its dividend for 3 consecutive years. World Point Terminals is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of recent ratings for World Point Terminals and Phillips 66 Partners, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
World Point Terminals 0 2 0 0 2.00
Phillips 66 Partners 1 1 9 0 2.73

World Point Terminals currently has a consensus target price of $17.00, indicating a potential downside of 1.68%. Phillips 66 Partners has a consensus target price of $57.13, indicating a potential upside of 21.18%. Given Phillips 66 Partners’ stronger consensus rating and higher probable upside, analysts plainly believe Phillips 66 Partners is more favorable than World Point Terminals.

Summary

Phillips 66 Partners beats World Point Terminals on 10 of the 13 factors compared between the two stocks.

About World Point Terminals

World Point Terminals, LP owns, operates, develops and acquires liquid bulk storage terminals and other assets relating to the storage of petroleum products, including light refined products, heavy refined products and crude oil. The Company operates fee-based facilities located along the East Coast, Gulf Coast and Midwest regions of the United States. As of December 31, 2016, through its subsidiary, Center Point Terminal Company, LLC (Center Point), the Company owned and operated 15.6 million barrels of tankage at terminals, which are located in the East Coast, Gulf Coast and Midwest regions of the United States. The Company’s terminal facilities are located on waterways, providing ship or barge access for the movement of petroleum products, and have truck racks with loading logistics. Its terminal facilities also have rail or pipeline access.

About Phillips 66 Partners

Phillips 66 Partners LP (Phillips 66) owns, operates, develops and acquires fee-based crude oil, refined petroleum product and natural gas liquids (NGL) pipelines, terminals and other transportation and midstream assets. The Company’s assets consist of systems, such as Clifton Ridge Crude System, Eagle Ford Gathering System, Ponca Crude System, Billings Crude System, Borger Crude System, Sweeny to Pasadena Products System, Hartford Connector Products System, Gold Line Products System, Cross-Channel Connector Products System, Ponca Products System, Billings Products System, Bayway Products System, Standish Pipeline, Borger Products System, River Parish NGL System, Medford Spheres, Bayway Rail Rack, Ferndale Rail Rack, Sand Hills/Southern Hills Joint Ventures, Explorer Pipeline Joint Venture, Bakken Joint Ventures, Bayou Bridge Pipeline Joint Venture, STACK Pipeline Joint Venture, and Sweeny Fractionator and Clemens Caverns.

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