Semgroup Corporation (SEMG) vs. Valero Energy Partners (VLP) Critical Contrast

Semgroup Corporation (NYSE: SEMG) and Valero Energy Partners (NYSE:VLP) are both oils/energy companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, valuation, earnings, profitability, institutional ownership, risk and dividends.

Volatility and Risk

Semgroup Corporation has a beta of 2.08, suggesting that its share price is 108% more volatile than the S&P 500. Comparatively, Valero Energy Partners has a beta of 0.73, suggesting that its share price is 27% less volatile than the S&P 500.

Profitability

This table compares Semgroup Corporation and Valero Energy Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Semgroup Corporation -0.41% 5.96% 2.40%
Valero Energy Partners 54.43% 184.08% 22.28%

Dividends

Semgroup Corporation pays an annual dividend of $1.80 per share and has a dividend yield of 7.9%. Valero Energy Partners pays an annual dividend of $1.92 per share and has a dividend yield of 4.6%. Semgroup Corporation pays out -2,250.0% of its earnings in the form of a dividend. Valero Energy Partners pays out 67.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Semgroup Corporation has increased its dividend for 3 consecutive years and Valero Energy Partners has increased its dividend for 2 consecutive years. Semgroup Corporation is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

89.8% of Semgroup Corporation shares are owned by institutional investors. Comparatively, 20.7% of Valero Energy Partners shares are owned by institutional investors. 0.8% of Semgroup Corporation shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Semgroup Corporation and Valero Energy Partners’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Semgroup Corporation $1.33 billion 1.34 $2.09 million ($0.08) -283.75
Valero Energy Partners $362.62 million 8.10 $188.83 million $2.83 14.69

Valero Energy Partners has higher revenue, but lower earnings than Semgroup Corporation. Semgroup Corporation is trading at a lower price-to-earnings ratio than Valero Energy Partners, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Semgroup Corporation and Valero Energy Partners, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Semgroup Corporation 0 3 2 0 2.40
Valero Energy Partners 0 2 6 0 2.75

Semgroup Corporation presently has a consensus target price of $29.50, suggesting a potential upside of 29.96%. Valero Energy Partners has a consensus target price of $53.14, suggesting a potential upside of 27.81%. Given Semgroup Corporation’s higher possible upside, analysts plainly believe Semgroup Corporation is more favorable than Valero Energy Partners.

Summary

Semgroup Corporation beats Valero Energy Partners on 9 of the 17 factors compared between the two stocks.

Semgroup Corporation Company Profile

SemGroup Corporation is a provider of gathering, transportation, storage, distribution, marketing and other midstream services to producers, refiners of petroleum products and other market participants located in the Midwest and Rocky Mountain regions of the United States and Canada. The Company’s segments include Crude Transportation, which operates crude oil pipelines and truck transportation businesses in the United States; Crude Facilities, which operates crude oil storage and terminal businesses in the United States; Crude Supply and Logistics, which operates a crude oil marketing business; SemGas, which provides natural gas gathering and processing services; SemCAMS, which operates natural gas processing and gathering facilities in Alberta, Canada; SemLogistics, which owns petroleum products storage facility in the United Kingdom, and SemMexico, which provides liquid asphalt cement products and product application services to the Mexican market, and Corporate and Other.

Valero Energy Partners Company Profile

Valero Energy Partners LP owns, operates, develops and acquires crude oil and refined petroleum products pipelines, terminals, and other transportation and logistics assets. The Company’s assets include crude oil and refined petroleum products pipelines, terminals, and other logistics assets in the United States Gulf Coast and the United States Mid-Continent regions that are integral to the operations of the ten of Valero Energy Corporation (Valero) refineries. It provides assets and services, such as Port Arthur logistics system, McKee logistics system, Memphis logistics system, Three Rivers logistics system, Ardmore logistics system, Houston logistics system, St. Charles logistics system, Corpus Christi logistics system and Meraux logistics system. Port Arthur logistics system includes its Lucas crude system and its Port Arthur products system. McKee logistics system is a crude oil and refined petroleum products pipeline and terminal system supporting Valero’s McKee Refinery.

Receive News & Ratings for Semgroup Corporation Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Semgroup Corporation and related companies with MarketBeat.com's FREE daily email newsletter.

Latest News

Leave a Reply