Nustar GP Holdings (NYSE:NSH) vs. Holly Energy Partners, L.P. (HEP) Financial Contrast

Holly Energy Partners, L.P. (NYSE: HEP) and Nustar GP Holdings (NYSE:NSH) are both oils/energy companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, risk, institutional ownership, dividends, earnings, analyst recommendations and profitability.

Insider & Institutional Ownership

47.2% of Holly Energy Partners, L.P. shares are held by institutional investors. Comparatively, 55.9% of Nustar GP Holdings shares are held by institutional investors. 0.8% of Holly Energy Partners, L.P. shares are held by company insiders. Comparatively, 21.4% of Nustar GP Holdings shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Holly Energy Partners, L.P. and Nustar GP Holdings’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Holly Energy Partners, L.P.	34.06%	34.14%	8.59%
Nustar GP Holdings	176.62%	25.68%	22.63%

Dividends

Holly Energy Partners, L.P. pays an annual dividend of $2.53 per share and has a dividend yield of 7.8%. Nustar GP Holdings pays an annual dividend of $2.18 per share and has a dividend yield of 10.1%. Holly Energy Partners, L.P. pays out 207.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Nustar GP Holdings pays out 102.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Nustar GP Holdings has raised its dividend for 13 consecutive years. Nustar GP Holdings is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Holly Energy Partners, L.P. and Nustar GP Holdings, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Holly Energy Partners, L.P.	1	3	0	0	1.75
Nustar GP Holdings	0	7	0	0	2.00

Holly Energy Partners, L.P. presently has a consensus price target of $35.33, suggesting a potential upside of 9.49%. Nustar GP Holdings has a consensus price target of $28.00, suggesting a potential upside of 29.33%. Given Nustar GP Holdings’ stronger consensus rating and higher probable upside, analysts plainly believe Nustar GP Holdings is more favorable than Holly Energy Partners, L.P..

Volatility & Risk

Holly Energy Partners, L.P. has a beta of 0.86, indicating that its share price is 14% less volatile than the S&P 500. Comparatively, Nustar GP Holdings has a beta of 1.18, indicating that its share price is 18% more volatile than the S&P 500.

Valuation & Earnings

This table compares Holly Energy Partners, L.P. and Nustar GP Holdings’ top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	EBITDA	Earnings Per Share	Price/Earnings Ratio
Holly Energy Partners, L.P.	$419.91 million	4.94	$274.58 million	$1.22	26.45
Nustar GP Holdings	$51.88 million	17.92	$91.06 million	$2.12	10.21

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

Summary

Nustar GP Holdings beats Holly Energy Partners, L.P. on 12 of the 16 factors compared between the two stocks.

Holly Energy Partners, L.P. Company Profile

Holly Energy Partners, L.P., (HEP) is engaged in the business of operating a system of petroleum product and crude pipelines, storage tanks, distribution terminals, loading rack facilities and refinery processing units in West Texas, New Mexico, Utah, Nevada, Oklahoma, Wyoming, Kansas, Arizona, Idaho and Washington. The Company operates through segments, including pipelines and terminals segment and a refinery processing unit segment. As of December 31, 2016, its pipelines and terminals segment consisted of 24 main pipeline segments; Crude gathering networks in Texas and New Mexico; 10 refined product terminals; one crude terminal; 8,300 track feet of rail storage located at one facility; seven locations with truck and/or rail racks, and Tankage at all six of HollyFrontier Corporation’s (HFC’s) refining facility locations. As of December 31, 2016, the Company’s refinery processing unit segment consisted of five refinery processing units at two of HFC’s refining facility locations.

Nustar GP Holdings Company Profile

NuStar GP Holdings, LLC holds interests in NuStar Energy L.P. (NuStar Energy). NuStar Energy is engaged in the transportation of petroleum products and anhydrous ammonia, the terminalling and storage of petroleum products and the marketing of petroleum products. NuStar Energy has terminal and storage facilities in the United States, Canada, Mexico, the Netherlands, including St. Eustatius in the Caribbean, and the United Kingdom. The Company manages NuStar Energy through its ownership of NuStar GP, LLC and Riverwalk Holdings, LLC, which own Riverwalk Logistics L.P., the general partner of NuStar Energy.