Head-To-Head Analysis: Valero Energy Partners (NYSE:VLP) versus Noble Midstream Partners (NBLX)

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

Insider and Institutional Ownership

75.7% of Noble Midstream Partners shares are owned by institutional investors. Comparatively, 29.3% of Valero Energy Partners shares are owned by institutional investors. 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.

Dividends

Noble Midstream Partners pays an annual dividend of $1.87 per share and has a dividend yield of 3.3%. Valero Energy Partners pays an annual dividend of $1.92 per share and has a dividend yield of 4.2%. Noble Midstream Partners pays out 50.5% 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. Noble Midstream Partners has increased its dividend for 3 consecutive years.

Analyst Recommendations

This is a summary of recent ratings and target prices for Noble Midstream Partners and Valero Energy Partners, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Noble Midstream Partners 0 2 6 0 2.75
Valero Energy Partners 0 3 5 0 2.63

Noble Midstream Partners currently has a consensus target price of $54.29, suggesting a potential downside of 4.36%. Valero Energy Partners has a consensus target price of $51.71, suggesting a potential upside of 14.46%. Given Valero Energy Partners’ higher possible upside, analysts plainly believe Valero Energy Partners is more favorable than Noble Midstream Partners.

Earnings and Valuation

This table compares Noble Midstream Partners and Valero Energy Partners’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Noble Midstream Partners $160.72 million 8.20 $74.44 million $3.70 15.34
Valero Energy Partners $362.62 million 8.81 $188.83 million $2.83 15.96

Valero Energy Partners has higher revenue and earnings than Noble Midstream Partners. Noble Midstream Partners 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.

Profitability

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

Net Margins Return on Equity Return on Assets
Noble Midstream Partners 55.83% 36.74% 24.51%
Valero Energy Partners 54.43% 184.08% 22.28%

Summary

Noble Midstream Partners beats Valero Energy Partners on 8 of the 15 factors compared between the two stocks.

About Noble Midstream Partners

Noble Midstream Partners LP is engaged in owning, operating, developing and acquiring a range of domestic midstream infrastructure assets. The Company’s areas of focus are in the area of Denver-Julesburg (DJ) Basin in Colorado and the Southern Delaware Basin position of the Permian Basin in Texas (Delaware Basin). Its segments include Gathering Systems, Fresh Water Delivery, and Investments in White Cliffs and Other. The Gathering Systems segment includes crude oil, natural gas and produced water gathering, as well as crude oil treating. It holds interest in White Cliffs Pipeline L.L.C. (the White Cliffs Interest). The Investments in White Cliffs and Other segment includes activity associated with the White Cliffs Interest. As of December 31, 2016, the White Cliffs Pipeline system consisted of two 527-mile crude oil pipelines that extended from the DJ Basin to the Cushing, Oklahoma. It provides crude oil, natural gas, and water-related midstream services for Noble Energy, Inc.

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. 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.

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