Valero Energy Partners (NYSE: EEP) and Enbridge Energy Partners (NYSE:EEP) are both mid-cap oils/energy companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, institutional ownership, profitability, analyst recommendations, risk, valuation and dividends.
Valero Energy Partners pays an annual dividend of $2.20 per share and has a dividend yield of 6.1%. Enbridge Energy Partners pays an annual dividend of $1.40 per share and has a dividend yield of 12.4%. Valero Energy Partners pays out 79.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Enbridge Energy Partners pays out 175.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Valero Energy Partners has increased its dividend for 3 consecutive years.
28.0% of Valero Energy Partners shares are held by institutional investors. Comparatively, 42.6% of Enbridge Energy Partners shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Earnings and Valuation
This table compares Valero Energy Partners and Enbridge Energy Partners’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Valero Energy Partners||$452.01 million||5.64||$238.43 million||$2.77||13.01|
|Enbridge Energy Partners||$2.43 billion||1.52||$282.00 million||$0.80||14.16|
Enbridge Energy Partners has higher revenue and earnings than Valero Energy Partners. Valero Energy Partners is trading at a lower price-to-earnings ratio than Enbridge Energy Partners, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Valero Energy Partners has a beta of 0.77, indicating that its stock price is 23% less volatile than the S&P 500. Comparatively, Enbridge Energy Partners has a beta of 1.35, indicating that its stock price is 35% more volatile than the S&P 500.
This is a summary of current ratings and recommmendations for Valero Energy Partners and Enbridge Energy Partners, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Valero Energy Partners||0||8||4||0||2.33|
|Enbridge Energy Partners||2||7||0||0||1.78|
Valero Energy Partners presently has a consensus target price of $46.05, suggesting a potential upside of 27.73%. Enbridge Energy Partners has a consensus target price of $12.22, suggesting a potential upside of 7.87%. Given Valero Energy Partners’ stronger consensus rating and higher probable upside, research analysts plainly believe Valero Energy Partners is more favorable than Enbridge Energy Partners.
This table compares Valero Energy Partners and Enbridge Energy Partners’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Valero Energy Partners||46.87%||108.14%||16.40%|
|Enbridge Energy Partners||9.25%||7.59%||3.45%|
Valero Energy Partners beats Enbridge Energy Partners on 10 of the 16 factors compared between the two stocks.
About Valero Energy Partners
Valero Energy Partners LP owns, operates, develops, and acquires crude oil and refined petroleum products pipelines, terminals, and other transportation and logistics assets in the United States. Its assets consists of the Port Arthur logistics system, the McKee logistics system, the Memphis logistics system, the Three Rivers logistics system, the Ardmore logistics system, the Houston logistics system, the St. Charles logistics system, the Corpus Christi logistics system, and the Meraux logistics system located in the Gulf Coast and Mid-Continent regions of the United States. Valero Energy Partners GP LLC serves as a general partner of the company. The company was founded in 2013 and is headquartered in San Antonio, Texas. Valero Energy Partners LP is a subsidiary of Valero Energy Corporation.
About Enbridge Energy Partners
Enbridge Energy Partners, L.P. provides crude oil and liquid petroleum gathering, transportation, and storage services assets in the United States. The company's Lakehead system consists of approximately 4,212 miles of pipe and 74 pump stations located in the Great Lakes and Midwest regions of the United States. Its North Dakota crude oil system comprises approximately 660 miles, has 12 pump stations, delivery points, and storage facilities; and Mid-Continent system includes approximately 20 million barrels of storage capacity. The company serves integrated oil companies, independent oil producers, refiners, and marketers. Enbridge Energy Company, Inc. operates as a general partner of Enbridge Energy Partners, L.P. The company was formerly known as Lakehead Pipe Line Partners, L.P. and changed its name to Enbridge Energy Partners, L.P. in 2001. Enbridge Energy Partners, L.P. was founded in 1991 and is headquartered in Houston, Texas.
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