Holly Energy Partners (HEP) and Phillips 66 Partners (PSXP) Head to Head Comparison

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Holly Energy Partners (NYSE: PSXP) and Phillips 66 Partners (NYSE:PSXP) 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 institutional ownership, analyst recommendations, dividends, profitability, risk, earnings and valuation.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Holly Energy Partners and Phillips 66 Partners, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Holly Energy Partners 3 5 0 0 1.63
Phillips 66 Partners 0 5 8 0 2.62

Holly Energy Partners currently has a consensus target price of $30.38, indicating a potential downside of 3.26%. Phillips 66 Partners has a consensus target price of $57.04, indicating a potential upside of 7.50%. Given Phillips 66 Partners’ stronger consensus rating and higher possible upside, analysts plainly believe Phillips 66 Partners is more favorable than Holly Energy Partners.

Dividends

Holly Energy Partners pays an annual dividend of $2.64 per share and has a dividend yield of 8.4%. Phillips 66 Partners pays an annual dividend of $3.01 per share and has a dividend yield of 5.7%. Holly Energy Partners pays out 150.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Phillips 66 Partners pays out 116.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Holly Energy Partners has increased its dividend for 14 consecutive years and Phillips 66 Partners has increased its dividend for 4 consecutive years. Holly Energy Partners is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

32.6% of Holly Energy Partners shares are owned by institutional investors. Comparatively, 38.8% of Phillips 66 Partners shares are owned by institutional investors. 0.8% of Holly Energy Partners 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.

Risk and Volatility

Holly Energy Partners has a beta of 0.94, meaning that its stock price is 6% less volatile than the S&P 500. Comparatively, Phillips 66 Partners has a beta of 1.41, meaning that its stock price is 41% more volatile than the S&P 500.

Profitability

This table compares Holly Energy Partners and Phillips 66 Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Holly Energy Partners 44.01% 34.10% 8.62%
Phillips 66 Partners 48.17% 39.53% 12.11%

Earnings and Valuation

This table compares Holly Energy Partners and Phillips 66 Partners’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Holly Energy Partners $454.36 million 7.29 $195.04 million $1.76 17.84
Phillips 66 Partners $1.17 billion 5.58 $461.00 million $2.59 20.49

Phillips 66 Partners has higher revenue and earnings than Holly Energy Partners. Holly Energy Partners is trading at a lower price-to-earnings ratio than Phillips 66 Partners, indicating that it is currently the more affordable of the two stocks.

Summary

Phillips 66 Partners beats Holly Energy Partners on 13 of the 17 factors compared between the two stocks.

About Holly Energy Partners

Holly Energy Partners, L.P. owns and operates petroleum product and crude pipelines, storage tanks, distribution terminals, loading rack facilities, and refinery processing units that support the refining and marketing operations of HollyFrontier Corporation in West Texas, New Mexico, Utah, Nevada, Oklahoma, Wyoming, Kansas, Arizona, Idaho, and Washington. It operates through Pipelines and Terminals, and Refinery Processing Units segments. The company operates refined product pipelines that transport conventional gasolines, reformulated gasolines, and low-octane gasolines for oxygenate blending, as well as distillates, such as high- and low-sulfur diesel and jet fuels, and liquefied petroleum gases; intermediate product pipelines that transport intermediate feedstocks and crude oils, and gases; and oil trunk, gathering, and connection pipelines that delivers crude oil. It operates 26 main pipelines; crude gathering networks; 10 refined product terminals; 1 crude terminal; 31,800 track feet of rail storage; 7 locations with truck and/or rail racks; and tankages at 6 refining facility locations, as well as 5 refinery processing units. HEP Logistics Holdings, L.P. serves as the general partner of the company. Holly Energy Partners, L.P. was founded in 2004 and is based in Dallas, Texas. Holly Energy Partners, L.P. operates as a subsidiary of HollyFrontier Corporation.

About Phillips 66 Partners

Phillips 66 Partners LP owns, operates, develops, and acquires crude oil, refined petroleum products, and natural gas liquids pipelines, terminals, and other transportation and midstream assets. The company operates pipeline assets in Lake Charles, Sweeny, Wood River, Borger/Ponca City, Billings, and Borger; terminal, rail rack, and storage assets in Louisiana, Texas, Illinois, Missouri, Kansas, Oklahoma, New Jersey, Washington, Wyoming, and Montana; marine assets in Lake Charles and Wood River; and natural gas liquids assets in Texas and Louisiana. Phillips 66 Partners GP LLC operates as the general partner of Phillips 66 Partners LP. The company was founded in 2013 and is headquartered in Houston, Texas. Phillips 66 Partners LP is a subsidiary of Phillips 66 Project Development Inc.

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