Contrasting Western Gas Partners (WES) & Arc Logistics Partners (ARCX)
Western Gas Partners (NYSE: WES) and Arc Logistics Partners (NYSE:ARCX) are both oils/energy companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, institutional ownership, earnings, valuation, dividends, analyst recommendations and risk.
Western Gas Partners pays an annual dividend of $3.62 per share and has a dividend yield of 7.9%. Arc Logistics Partners pays an annual dividend of $1.76 per share and has a dividend yield of 10.7%. Western Gas Partners pays out 294.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Arc Logistics Partners pays out 359.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Western Gas Partners has increased its dividend for 9 consecutive years and Arc Logistics Partners has increased its dividend for 2 consecutive years.
This table compares Western Gas Partners and Arc Logistics Partners’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Western Gas Partners||26.41%||14.68%||7.24%|
|Arc Logistics Partners||9.14%||3.38%||1.88%|
Institutional & Insider Ownership
61.8% of Western Gas Partners shares are held by institutional investors. Comparatively, 44.4% of Arc Logistics Partners shares are held by institutional investors. 0.0% of Western Gas Partners shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
This is a breakdown of recent recommendations and price targets for Western Gas Partners and Arc Logistics Partners, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Western Gas Partners||1||3||7||0||2.55|
|Arc Logistics Partners||0||3||0||0||2.00|
Western Gas Partners currently has a consensus price target of $60.20, suggesting a potential upside of 30.98%. Arc Logistics Partners has a consensus price target of $16.50, suggesting a potential upside of 0.30%. Given Western Gas Partners’ stronger consensus rating and higher possible upside, equities analysts plainly believe Western Gas Partners is more favorable than Arc Logistics Partners.
Risk and Volatility
Western Gas Partners has a beta of 1.15, meaning that its share price is 15% more volatile than the S&P 500. Comparatively, Arc Logistics Partners has a beta of 0.79, meaning that its share price is 21% less volatile than the S&P 500.
Earnings & Valuation
This table compares Western Gas Partners and Arc Logistics Partners’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Western Gas Partners||$1.80 billion||3.89||$591.33 million||$1.23||37.37|
|Arc Logistics Partners||$105.38 million||3.05||$15.04 million||$0.49||33.57|
Western Gas Partners has higher revenue and earnings than Arc Logistics Partners. Arc Logistics Partners is trading at a lower price-to-earnings ratio than Western Gas Partners, indicating that it is currently the more affordable of the two stocks.
Western Gas Partners beats Arc Logistics Partners on 16 of the 17 factors compared between the two stocks.
Western Gas Partners Company Profile
Western Gas Partners, LP is a master limited partnership (MLP) that acquires, owns, develops and operates midstream energy assets. The Company is engaged in the business of gathering, processing, compressing, treating and transporting natural gas, condensate, natural gas liquids (NGLs) and crude oil in the United States. The Company provides midstream services for Anadarko Petroleum Corporation (Anadarko), as well as for third-party producers and customers. The Company’s operations and activities are managed by its general partner, which is indirectly controlled by Anadarko through Western Gas Equity Partners, LP (WGP). As of December 31, 2016, its assets and investments consisted of gathering systems, treating facilities, natural gas processing plants/trains, NGL pipelines, natural gas pipelines and oil pipelines. These assets and investments are located in the Rocky Mountains (Colorado, Utah and Wyoming), North-central Pennsylvania and Texas.
Arc Logistics Partners Company Profile
Arc Logistics Partners LP owns, operates, develops and acquires a portfolio of energy logistics assets. The Company is engaged in the terminaling, storage, throughput and transloading of crude oil and petroleum products. The Company is focused on growing its business through the optimization, organic development and acquisition of terminaling, storage, rail, pipeline and other energy logistics assets. As of March 6, 2017, the Company’s energy logistics assets were located in the East Coast, Gulf Coast, Midwest, Rocky Mountains and West Coast regions of the United States and supplied a group of third-party customers, including oil companies, independent refiners, crude oil and petroleum product marketers, distributors and various industrial manufacturers. As of December 31, 2016, its assets consisted of 21 terminals in 12 states; four rail transloading facilities, and the liquefied natural gas (LNG) Interest in connection with the LNG Facility.
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