Arc Logistic Partners (NYSE: ARCX) and Crestwood Equity Partners (NYSE:CEQP) are both small-cap oils/energy companies, but which is the better stock? We will compare the two companies based on the strength of their dividends, valuation, analyst recommendations, profitability, risk, earnings and institutional ownership.

Dividends

Arc Logistic Partners pays an annual dividend of $1.76 per share and has a dividend yield of 10.8%. Crestwood Equity Partners pays an annual dividend of $2.40 per share and has a dividend yield of 10.3%. Arc Logistic Partners pays out 247.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Crestwood Equity Partners pays out -85.1% of its earnings in the form of a dividend. Arc Logistic Partners has increased its dividend for 2 consecutive years. Arc Logistic Partners is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Arc Logistic Partners and Crestwood Equity Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Arc Logistic Partners 9.13% 3.26% 1.81%
Crestwood Equity Partners -5.36% -3.34% -1.41%

Insider and Institutional Ownership

42.9% of Arc Logistic Partners shares are held by institutional investors. Comparatively, 65.7% of Crestwood Equity Partners shares are held by institutional investors. 36.2% of Crestwood Equity Partners shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Risk and Volatility

Arc Logistic Partners has a beta of 0.8, indicating that its stock price is 20% less volatile than the S&P 500. Comparatively, Crestwood Equity Partners has a beta of 2.75, indicating that its stock price is 175% more volatile than the S&P 500.

Earnings and Valuation

This table compares Arc Logistic Partners and Crestwood Equity Partners’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Arc Logistic Partners $105.38 million 3.04 $15.04 million $0.71 23.04
Crestwood Equity Partners $2.52 billion 0.65 -$216.30 million ($2.82) -8.28

Arc Logistic Partners has higher revenue, but lower earnings than Crestwood Equity Partners. Crestwood Equity Partners is trading at a lower price-to-earnings ratio than Arc Logistic Partners, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent recommendations for Arc Logistic Partners and Crestwood Equity Partners, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Arc Logistic Partners 0 3 0 0 2.00
Crestwood Equity Partners 0 0 4 0 3.00

Arc Logistic Partners currently has a consensus price target of $16.50, indicating a potential upside of 0.86%. Crestwood Equity Partners has a consensus price target of $27.75, indicating a potential upside of 18.84%. Given Crestwood Equity Partners’ stronger consensus rating and higher possible upside, analysts plainly believe Crestwood Equity Partners is more favorable than Arc Logistic Partners.

About Arc Logistic Partners

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.

About Crestwood Equity Partners

Crestwood Equity Partners LP is a holding company and a master limited partnership (MLP). The Company develops, acquires, owns or controls, and operates assets and operations within the energy midstream sector. The Company’s segments include gathering and processing (G&P), which includes its natural gas, crude oil and produced water G&P operations; storage and transportation, which includes its natural gas and crude oil storage and transportation operations, and marketing, supply and logistics, which includes its natural gas liquid (NGL) supply and logistics business, crude oil storage and rail loading facilities and fleet, and salt production business. The Company provides infrastructure solutions to service natural gas and crude oil shale plays across the United States. It owns and operates a portfolio of crude oil and natural gas gathering, processing, storage and transportation assets. Its operating assets are owned by or through its subsidiary, Crestwood Midstream Partners LP.

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