Arc Logistics Partners (NYSE: ARCX) and Western Gas Partners (NYSE:WES) are both energy companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, profitability, analyst recommendations, institutional ownership, earnings, risk and valuation.
This table compares Arc Logistics Partners and Western Gas Partners’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Arc Logistics Partners||9.14%||3.38%||1.88%|
|Western Gas Partners||26.41%||14.68%||7.24%|
Arc Logistics Partners has a beta of 0.79, suggesting that its stock price is 21% less volatile than the S&P 500. Comparatively, Western Gas Partners has a beta of 1.14, suggesting that its stock price is 14% more volatile than the S&P 500.
Earnings & Valuation
This table compares Arc Logistics Partners and Western Gas Partners’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Arc Logistics Partners||$105.38 million||3.05||$15.04 million||$0.41||40.05|
|Western Gas Partners||$1.80 billion||3.79||$591.33 million||$1.23||36.42|
Western Gas Partners has higher revenue and earnings than Arc Logistics Partners. Western Gas Partners is trading at a lower price-to-earnings ratio than Arc Logistics Partners, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of recent ratings and recommmendations for Arc Logistics Partners and Western Gas Partners, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Arc Logistics Partners||0||3||0||0||2.00|
|Western Gas Partners||1||3||7||0||2.55|
Arc Logistics Partners currently has a consensus target price of $16.50, suggesting a potential upside of 0.49%. Western Gas Partners has a consensus target price of $60.20, suggesting a potential upside of 34.38%. Given Western Gas Partners’ stronger consensus rating and higher possible upside, analysts clearly believe Western Gas Partners is more favorable than Arc Logistics Partners.
Insider & Institutional Ownership
44.4% of Arc Logistics Partners shares are owned by institutional investors. Comparatively, 61.8% of Western Gas Partners shares are owned by institutional investors. 0.0% of Western Gas Partners shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Arc Logistics Partners pays an annual dividend of $1.76 per share and has a dividend yield of 10.7%. Western Gas Partners pays an annual dividend of $3.62 per share and has a dividend yield of 8.1%. Arc Logistics Partners pays out 429.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Western Gas Partners pays out 294.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Arc Logistics Partners has increased its dividend for 9 consecutive years and Western Gas Partners has increased its dividend for 2 consecutive years. Arc Logistics Partners is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Western Gas Partners beats Arc Logistics Partners on 15 of the 17 factors compared between the two stocks.
About Arc Logistics Partners
Arc Logistics Partners LP owns, operates, develops and acquires a portfolio of energy logistics assets. The Company is engaged in the terminaling, storage, throughput and transloading of crude oil and petroleum products. The Company is focused on growing its business through the optimization, organic development and acquisition of terminaling, storage, rail, pipeline and other energy logistics assets. As of March 6, 2017, the Company’s energy logistics assets were located in the East Coast, Gulf Coast, Midwest, Rocky Mountains and West Coast regions of the United States and supplied a group of third-party customers, including oil companies, independent refiners, crude oil and petroleum product marketers, distributors and various industrial manufacturers. As of December 31, 2016, its assets consisted of 21 terminals in 12 states; four rail transloading facilities, and the liquefied natural gas (LNG) Interest in connection with the LNG Facility.
About Western Gas Partners
Western Gas Partners, LP is a master limited partnership (MLP) that acquires, owns, develops and operates midstream energy assets. The Company is engaged in the business of gathering, processing, compressing, treating and transporting natural gas, condensate, natural gas liquids (NGLs) and crude oil in the United States. The Company provides midstream services for Anadarko Petroleum Corporation (Anadarko), as well as for third-party producers and customers. The Company’s operations and activities are managed by its general partner, which is indirectly controlled by Anadarko through Western Gas Equity Partners, LP (WGP). As of December 31, 2016, its assets and investments consisted of gathering systems, treating facilities, natural gas processing plants/trains, NGL pipelines, natural gas pipelines and oil pipelines. These assets and investments are located in the Rocky Mountains (Colorado, Utah and Wyoming), North-central Pennsylvania and Texas.
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