Alon USA Partners, (NYSE:ALDW) and Midcoast Energy Partners (MEP) Critical Comparison
Alon USA Partners, (NYSE: ALDW) and Midcoast Energy Partners (NYSE:MEP) are both oils/energy companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, profitabiliy, dividends, earnings, analyst recommendations, valuation and risk.
Alon USA Partners, pays an annual dividend of $1.52 per share and has a dividend yield of 12.5%. Midcoast Energy Partners pays an annual dividend of $1.43 per share and has a dividend yield of 18.0%. Alon USA Partners, pays out 214.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Midcoast Energy Partners pays out -81.2% of its earnings in the form of a dividend. Alon USA Partners, has increased its dividend for 2 consecutive years and Midcoast Energy Partners has increased its dividend for 2 consecutive years. Midcoast Energy Partners is clearly the better dividend stock, given its higher yield and lower payout ratio.
This is a summary of recent recommendations for Alon USA Partners, and Midcoast Energy Partners, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Alon USA Partners,||0||2||3||0||2.60|
|Midcoast Energy Partners||0||1||0||0||2.00|
Alon USA Partners, presently has a consensus target price of $12.25, indicating a potential upside of 0.74%. Midcoast Energy Partners has a consensus target price of $8.00, indicating a potential upside of 0.63%. Given Alon USA Partners,’s stronger consensus rating and higher possible upside, research analysts clearly believe Alon USA Partners, is more favorable than Midcoast Energy Partners.
Risk & Volatility
Alon USA Partners, has a beta of 1.06, indicating that its share price is 6% more volatile than the S&P 500. Comparatively, Midcoast Energy Partners has a beta of 2.53, indicating that its share price is 153% more volatile than the S&P 500.
Insider & Institutional Ownership
6.8% of Alon USA Partners, shares are held by institutional investors. Comparatively, 64.7% of Midcoast Energy Partners shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
This table compares Alon USA Partners, and Midcoast Energy Partners’ 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%|
|Midcoast Energy Partners||-5.25%||-34.51%||-2.64%|
Earnings and Valuation
This table compares Alon USA Partners, and Midcoast Energy Partners’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Alon USA Partners,||$2.04 billion||0.37||$136.09 million||$0.71||17.13|
|Midcoast Energy Partners||N/A||N/A||N/A||($1.76)||-4.52|
Alon USA Partners, has higher revenue and earnings than Midcoast Energy Partners. Midcoast Energy Partners 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.
Alon USA Partners, beats Midcoast Energy Partners on 8 of the 12 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 Midcoast Energy Partners
Midcoast Energy Partners, L.P. (MEP) is a limited partnership company that is engaged in the natural gas and natural gas liquids (NGL) midstream business. It operates through two segments: Gathering, Processing and Transportation, and Logistics and Marketing. It also provides marketing services of natural gas and NGLs to wholesale customers. The Company’s gathering, processing and transportation business includes natural gas and NGL gathering and transportation pipeline systems, natural gas processing and treating facilities, condensate stabilizers and an NGL fractionation facility. Its logistics and marketing business provides marketing services of natural gas, NGLs and condensate received from its gathering, processing and transportation business. The Company holds interest in Midcoast Operating, L.P., a Texas limited partnership that owns a network of natural gas and NGL gathering and transportation systems, natural gas processing and treating facilities.
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