Delek US Holdings (NYSE: DK) and Western Refining (NYSE:WNR) are both oils/energy companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, earnings, dividends, risk, valuation, analyst recommendations and institutional ownership.
Valuation and Earnings
This table compares Delek US Holdings and Western Refining’s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| Delek US Holdings | $4.58 billion | 0.29 | $58.00 million | ($2.32) | -9.09 |
| Western Refining | N/A | N/A | N/A | $1.52 | 23.80 |
Delek US Holdings has higher revenue and earnings than Western Refining. Delek US Holdings is trading at a lower price-to-earnings ratio than Western Refining, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Delek US Holdings has a beta of 1.92, meaning that its share price is 92% more volatile than the S&P 500. Comparatively, Western Refining has a beta of 1.26, meaning that its share price is 26% more volatile than the S&P 500.
Analyst Ratings
This is a summary of recent ratings and recommmendations for Delek US Holdings and Western Refining, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Delek US Holdings | 0 | 12 | 4 | 0 | 2.25 |
| Western Refining | 0 | 6 | 3 | 0 | 2.33 |
Delek US Holdings presently has a consensus target price of $24.71, suggesting a potential upside of 17.18%. Western Refining has a consensus target price of $30.75, suggesting a potential downside of 15.01%. Given Delek US Holdings’ higher probable upside, analysts clearly believe Delek US Holdings is more favorable than Western Refining.
Insider and Institutional Ownership
97.0% of Delek US Holdings shares are held by institutional investors. Comparatively, 64.8% of Western Refining shares are held by institutional investors. 1.4% of Delek US Holdings shares are held by insiders. Comparatively, 26.5% of Western Refining shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Profitability
This table compares Delek US Holdings and Western Refining’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Delek US Holdings | -3.15% | -4.60% | -1.80% |
| Western Refining | 0.90% | 2.76% | 1.52% |
Dividends
Delek US Holdings pays an annual dividend of $0.60 per share and has a dividend yield of 2.8%. Western Refining pays an annual dividend of $1.52 per share and has a dividend yield of 4.2%. Delek US Holdings pays out -25.9% of its earnings in the form of a dividend. Western Refining pays out 100.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Delek US Holdings has increased its dividend for 4 consecutive years.
Delek US Holdings Company Profile
Delek US Holdings, Inc. is a diversified downstream energy company. The Company has a broad platform consisting of refining, logistics, retail and wholesale marketing, renewables and asphalt operations. It operates through five segments: refining, logistics, asphalt, renewable and retail. Its refining assets consist of refineries operated in Tyler and Big Spring, Texas, El Dorado, Arkansas and Krotz Springs, Louisiana with a combined nameplate crude throughput capacity of 302,000 barrels per day. The Logistics segment gathers, transports and stores crude oil, as well as markets, distributes transports and stores refined production in the southeast United States and West Texas. Its asphalt operations consist of 14 owned or operated asphalt terminals serving markets from Tennessee to the west coast. Its Renewables segment consists of plants in Texas and Arkansas that produce biodiesel fuel. The Company’s convenience store retail business operates approximately 300 convenience stores.
Western Refining Company Profile
Western Refining, Inc. is an independent crude oil refiner and marketer of refined products. The Company operates through segments, including refining, Western Refining Logistics, LP (WNRL), retail and Other. As of December 31, 2016, the refining segment owned and operated three refineries that process crude oil and other feedstocks primarily into gasoline, diesel fuel, jet fuel and asphalt. The refining segment also sells refined products in the Mid-Atlantic region and Mexico. WNRL owns and operates terminal, storage, transportation and wholesale assets in the Southwest and terminal and storage assets in the Upper Great Plains region. The retail segment operates retail convenience stores and unmanned commercial fleet fueling (cardlock) locations located in the Southwest (Southwest Retail) and Upper Great Plains (SuperAmerica) regions. It markets refined products to a customer base, including wholesale distributors and retail chains.
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