Contrasting NGL Energy Partners (NGL) & Sunoco (SUN)

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

Analyst Recommendations

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This is a breakdown of current ratings for NGL Energy Partners and Sunoco, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NGL Energy Partners 0 2 2 0 2.50
Sunoco 2 6 5 0 2.23

NGL Energy Partners currently has a consensus target price of $15.50, suggesting a potential upside of 43.52%. Sunoco has a consensus target price of $30.94, suggesting a potential upside of 17.07%. Given NGL Energy Partners’ stronger consensus rating and higher possible upside, research analysts plainly believe NGL Energy Partners is more favorable than Sunoco.

Earnings & Valuation

This table compares NGL Energy Partners and Sunoco’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
NGL Energy Partners $13.02 billion 0.10 $136.81 million $0.95 11.37
Sunoco $11.72 billion 0.22 $149.00 million $2.29 11.54

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

Volatility and Risk

NGL Energy Partners has a beta of 1.03, suggesting that its stock price is 3% more volatile than the S&P 500. Comparatively, Sunoco has a beta of 0.63, suggesting that its stock price is 37% less volatile than the S&P 500.

Profitability

This table compares NGL Energy Partners and Sunoco’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NGL Energy Partners -0.97% -1.85% -0.57%
Sunoco 1.27% 17.06% 3.94%

Institutional and Insider Ownership

65.6% of NGL Energy Partners shares are owned by institutional investors. Comparatively, 30.0% of Sunoco shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Dividends

NGL Energy Partners pays an annual dividend of $1.56 per share and has a dividend yield of 14.4%. Sunoco pays an annual dividend of $3.30 per share and has a dividend yield of 12.5%. NGL Energy Partners pays out 164.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Sunoco pays out 144.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Sunoco has raised its dividend for 2 consecutive years.

Summary

Sunoco beats NGL Energy Partners on 10 of the 16 factors compared between the two stocks.

About NGL Energy Partners

NGL Energy Partners LP, through its subsidiaries, engages in the crude oil logistics, water solutions, liquids, retail propane, and refined products and renewables businesses in the United States. The Crude Oil Logistics segment purchases crude oil from producers and transports it to refineries for resale at pipeline injection stations, storage terminals, barge loading facilities, rail facilities, refineries, and other trade hubs. The Water Solutions segment is involved in the treatment and disposal of wastewater generated from crude oil and natural gas production operations; disposal of solids, such as tank bottoms, drilling fluids, and performs truck and frac tank washouts; and sale of recovered hydrocarbons. The Liquids segment supplies natural gas liquids to retailers, wholesalers, refiners, and petrochemical plants in the United States and Canada, as well as offers terminaling and storage services through its 21 terminals in the United States. The Retail Propane segment sells propane, distillates, and equipment and supplies to end users consisting of residential, agricultural, commercial, and industrial customers, as well as re-sellers. The Refined Products and Renewables segment markets gasoline, diesel, ethanol, and biodiesel products; and purchase and delivers refined petroleum and renewable products. NGL Energy Holdings LLC serves as the general partner of the company. The company was founded in 1940 and is headquartered in Tulsa, Oklahoma.

About Sunoco

Sunoco LP is engaged in the retail sale of motor fuels and merchandise through its Company-operated convenience stores and retail fuel sites, as well as the wholesale distribution of motor fuels to convenience stores, independent dealers, commercial customers and distributors. The Company operates through two segments: wholesale and retail. The Wholesale segment sells motor fuel to its retail segment and external customers. The Retail segment operates convenience stores selling a range of merchandise, food items, services and motor fuel. As of December 31, 2016, the Company operated approximately 1,345 convenience stores and fuel outlets in over 20 states, offering merchandise, food service, motor fuel and other services.

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