Teekay Tankers (NYSE: TNK) and Valero Energy Partners (NYSE:VLP) are both energy companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, risk, profitability, earnings, dividends, analyst recommendations and valuation.
This is a breakdown of current ratings for Teekay Tankers and Valero Energy Partners, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Valero Energy Partners||0||2||6||0||2.75|
Teekay Tankers currently has a consensus price target of $2.15, suggesting a potential upside of 55.80%. Valero Energy Partners has a consensus price target of $52.57, suggesting a potential upside of 12.60%. Given Teekay Tankers’ higher possible upside, research analysts clearly believe Teekay Tankers is more favorable than Valero Energy Partners.
Valuation and Earnings
This table compares Teekay Tankers and Valero Energy Partners’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Teekay Tankers||$300.30 million||0.82||$62.85 million||($0.28)||-4.93|
|Valero Energy Partners||$362.62 million||9.10||$188.83 million||$2.83||16.50|
Valero Energy Partners has higher revenue and earnings than Teekay Tankers. Teekay Tankers 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.
Insider & Institutional Ownership
28.4% of Teekay Tankers shares are owned by institutional investors. Comparatively, 29.2% of Valero Energy Partners shares are owned by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
This table compares Teekay Tankers and Valero Energy Partners’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Valero Energy Partners||54.43%||184.08%||22.28%|
Risk & Volatility
Teekay Tankers has a beta of 2.29, meaning that its share price is 129% more volatile than the S&P 500. Comparatively, Valero Energy Partners has a beta of 0.69, meaning that its share price is 31% less volatile than the S&P 500.
Teekay Tankers pays an annual dividend of $0.12 per share and has a dividend yield of 8.7%. Valero Energy Partners pays an annual dividend of $1.92 per share and has a dividend yield of 4.1%. Teekay Tankers pays out -42.9% 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. Teekay Tankers has increased its dividend for 3 consecutive years. Teekay Tankers is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valero Energy Partners beats Teekay Tankers on 11 of the 16 factors compared between the two stocks.
Teekay Tankers Company Profile
Teekay Tankers Ltd. is an international provider of marine transportation to the oil industries. The Company’s business is to own crude oil and product tankers. The Company has two segments: conventional tanker and ship-to-ship transfer. Its conventional tanker segment consists of the operation of all of its tankers, including those employed on full service lightering contracts. Its ship-to-ship transfer segment consists of its lightering support services, including those provided to the Company’s conventional tanker segment as part of full service lightering operations and other related services. Its operations are managed by Teekay Tankers Management Services Ltd., which provides the Company with commercial, technical, administrative and strategic services. Its fleet consists of approximately 60 conventional vessels (including over 10 in-chartered vessels and an approximately 50%-owned very large crude carrier (VLCC)) and approximately six ship-to-ship (STS) support vessels.
Valero Energy Partners Company Profile
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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