Valero Energy Corporation (NYSE: VLO) and Ngl Energy Partners Lp (NYSE:NGL) are both energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, risk, analyst recommendations, dividends, profitability, valuation and earnings.

Valuation & Earnings

This table compares Valero Energy Corporation and Ngl Energy Partners Lp’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Valero Energy Corporation $75.66 billion 0.47 $2.29 billion $4.61 17.81
Ngl Energy Partners Lp $13.02 billion 0.11 $136.81 million ($2.10) -5.57

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

Dividends

Valero Energy Corporation pays an annual dividend of $2.80 per share and has a dividend yield of 3.4%. Ngl Energy Partners Lp pays an annual dividend of $1.56 per share and has a dividend yield of 13.3%. Valero Energy Corporation pays out 60.7% of its earnings in the form of a dividend. Ngl Energy Partners Lp pays out -74.3% 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. Valero Energy Corporation has raised its dividend for 6 consecutive years. Ngl Energy Partners Lp is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk & Volatility

Valero Energy Corporation has a beta of 1.17, suggesting that its stock price is 17% more volatile than the S&P 500. Comparatively, Ngl Energy Partners Lp has a beta of 0.67, suggesting that its stock price is 33% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Valero Energy Corporation and Ngl Energy Partners Lp, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Valero Energy Corporation 0 10 9 0 2.47
Ngl Energy Partners Lp 0 2 3 0 2.60

Valero Energy Corporation currently has a consensus target price of $79.06, suggesting a potential downside of 3.69%. Ngl Energy Partners Lp has a consensus target price of $18.20, suggesting a potential upside of 55.56%. Given Ngl Energy Partners Lp’s stronger consensus rating and higher probable upside, analysts plainly believe Ngl Energy Partners Lp is more favorable than Valero Energy Corporation.

Insider & Institutional Ownership

81.8% of Valero Energy Corporation shares are held by institutional investors. Comparatively, 65.1% of Ngl Energy Partners Lp shares are held by institutional investors. 0.5% of Valero Energy Corporation shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Valero Energy Corporation 2.33% 9.87% 4.43%
Ngl Energy Partners Lp -1.40% -4.60% -1.45%

Summary

Valero Energy Corporation beats Ngl Energy Partners Lp on 12 of the 16 factors compared between the two stocks.

Valero Energy Corporation Company Profile

Valero Energy Corporation (Valero) is an independent petroleum refiner and ethanol producer. The Company’s segments include refining, ethanol and Valero Energy Partners LP (VLP). The refining segment includes its refining operations and the associated marketing activities. The ethanol segment includes its ethanol operations and the associated marketing activities, and logistics assets that support its ethanol operations. The Company owns logistics assets (crude oil pipelines, refined petroleum product pipelines, terminals, tanks, marine docks, truck rack bays and other assets) that support its refining operations. Some of these assets are owned by VLP, which is a midstream master limited partnership owned by the Company. VLP’s assets include crude oil and refined petroleum products pipeline and terminal systems in the United States Gulf Coast and the United States Mid-Continent regions. Its refineries produce conventional gasolines, premium gasolines and lubricants, among others.

Ngl Energy Partners Lp Company Profile

NGL Energy Partners LP owns and operates a vertically integrated energy business. The Company’s segments are crude oil logistics, water solutions, liquids, retail propane, refined products and renewables, and corporate and other. Its crude oil logistics segment includes owned and leased crude oil storage terminals, and owned and leased pipeline injection stations. Its water solutions segment provides services for the treatment and disposal of wastewater generated from crude oil and natural gas production, and for the disposal of solids, such as tank bottoms and drilling fluids. Its liquids segment supplies natural gas liquids to retailers, wholesalers, refiners and petrochemical plants throughout the United States and in Canada. Its retail propane segment consists of the retail marketing, and sale and distribution of propane and distillates, among others. The Company’s refined products and renewables segment is engaged in gasoline, diesel, ethanol and biodiesel marketing operations.

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