Analyzing Alon USA Partners, (ALDW) and Hess Corporation (HES)
Alon USA Partners, (NYSE: ALDW) and Hess Corporation (NYSE:HES) are both oils/energy companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, risk, earnings, valuation, analyst recommendations, institutional ownership and profitability.
This is a summary of recent recommendations for Alon USA Partners, and Hess Corporation, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Alon USA Partners,||0||2||3||0||2.60|
Alon USA Partners, presently has a consensus price target of $12.25, suggesting a potential upside of 9.08%. Hess Corporation has a consensus price target of $52.13, suggesting a potential upside of 17.15%. Given Hess Corporation’s higher probable upside, analysts plainly believe Hess Corporation 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 12.5%. Hess Corporation pays an annual dividend of $1.00 per share and has a dividend yield of 2.2%. 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. Hess Corporation pays out -5.2% of its earnings in the form of a dividend. Alon USA Partners, has increased its dividend for 2 consecutive years. Alon USA Partners, is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Insider & Institutional Ownership
5.3% of Alon USA Partners, shares are owned by institutional investors. Comparatively, 87.2% of Hess Corporation shares are owned by institutional investors. 11.8% of Hess Corporation shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Risk and Volatility
Alon USA Partners, has a beta of 1.05, indicating that its stock price is 5% more volatile than the S&P 500. Comparatively, Hess Corporation has a beta of 1.75, indicating that its stock price is 75% more volatile than the S&P 500.
This table compares Alon USA Partners, and Hess Corporation’s 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%|
Earnings and Valuation
This table compares Alon USA Partners, and Hess Corporation’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Alon USA Partners,||$2.04 billion||0.34||$136.33 million||$0.71||15.82|
|Hess Corporation||$4.94 billion||2.83||$1.45 billion||($19.30)||-2.31|
Hess Corporation has higher revenue and earnings than Alon USA Partners,. Hess Corporation is trading at a lower price-to-earnings ratio than Alon USA Partners,, indicating that it is currently the more affordable of the two stocks.
Hess Corporation beats Alon USA Partners, on 9 of the 16 factors compared between the two stocks.
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.
About Hess Corporation
Hess Corporation is an exploration and production company. The Company is engaged in exploration, development, production, transportation, purchase and sale of crude oil, natural gas liquids (NGL) and natural gas. The Company’s segments include Exploration and Production, and Bakken Midstream. Its Exploration and Production segment explores for, develops, produces, purchases and sells crude oil, NGLs and natural gas with production operations primarily in the United States, Denmark, Equatorial Guinea, the Malaysia/Thailand Joint Development Area (JDA), Malaysia and Norway. The Bakken Midstream segment provides fee-based services, including crude oil and natural gas gathering, processing of natural gas and the fractionation of NGLs, transportation of crude oil by rail car, terminaling and loading crude oil and NGLs, and the storage and terminaling of propane, primarily in the Bakken shale play of North Dakota.
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