Delek Logistics Partners (NYSE: DKL) and TC PipeLines (NYSE:TCP) are both oils/energy companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, dividends, risk, institutional ownership, profitability, analyst recommendations and valuation.
Delek Logistics Partners pays an annual dividend of $2.90 per share and has a dividend yield of 10.0%. TC PipeLines pays an annual dividend of $4.00 per share and has a dividend yield of 12.3%. Delek Logistics Partners pays out 138.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. TC PipeLines pays out 126.6% 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 Logistics Partners has raised its dividend for 4 consecutive years and TC PipeLines has raised its dividend for 8 consecutive years. TC PipeLines is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This is a summary of recent recommendations and price targets for Delek Logistics Partners and TC PipeLines, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Delek Logistics Partners||1||2||0||0||1.67|
Delek Logistics Partners presently has a consensus target price of $32.50, suggesting a potential upside of 12.46%. TC PipeLines has a consensus target price of $49.44, suggesting a potential upside of 51.44%. Given TC PipeLines’ stronger consensus rating and higher possible upside, analysts plainly believe TC PipeLines is more favorable than Delek Logistics Partners.
Insider and Institutional Ownership
24.6% of Delek Logistics Partners shares are held by institutional investors. Comparatively, 66.0% of TC PipeLines shares are held by institutional investors. 0.1% of TC PipeLines shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Valuation & Earnings
This table compares Delek Logistics Partners and TC PipeLines’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Delek Logistics Partners||$538.08 million||1.34||$69.40 million||$2.09||13.83|
|TC PipeLines||$422.00 million||5.52||$252.00 million||$3.16||10.33|
TC PipeLines has lower revenue, but higher earnings than Delek Logistics Partners. TC PipeLines is trading at a lower price-to-earnings ratio than Delek Logistics Partners, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Delek Logistics Partners has a beta of 1.13, suggesting that its share price is 13% more volatile than the S&P 500. Comparatively, TC PipeLines has a beta of 1.14, suggesting that its share price is 14% more volatile than the S&P 500.
This table compares Delek Logistics Partners and TC PipeLines’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Delek Logistics Partners||12.90%||-292.19%||16.38%|
TC PipeLines beats Delek Logistics Partners on 14 of the 17 factors compared between the two stocks.
Delek Logistics Partners Company Profile
Delek Logistics Partners, LP owns and operates logistics and marketing assets for crude oil, and intermediate and refined products in the United States. It operates in two segments, Pipelines and Transportation, and Wholesale Marketing and Terminalling. The Pipelines and Transportation segment consists of assets, including pipelines and trucks, and ancillary assets that provide crude oil gathering and crude oil, intermediate and finished products transportation, and storage services primarily in support of the Tyler and El Dorado refineries, as well as offers crude oil and other products transportation services to third parties. This segment operates approximately 400 miles of crude oil transportation pipelines; 406 miles of refined product pipelines; and approximately 600 miles of crude oil gathering and trunk lines with an aggregate of approximately 7.3 million barrels of active shell capacity. The Wholesale Marketing and Terminalling segment provides wholesale marketing, transporting, storing, and terminalling services related to refined products to independent third parties. Delek Logistics GP, LLC serves as the general partner of the company. Delek Logistics Partners, LP was founded in 2012 and is headquartered in Brentwood, Tennessee.
TC PipeLines Company Profile
TC Pipelines LP engages in nautral gas pipelines business. It transports natural gas in Western, Midwestern and Eastern United States. The firm is managed by its general partner TC Pipelines GP, Inc., which is an indirect, wholly-owned subsidiary of TransCanada. The company was founded in 1998 and is headquartered in Houston, TX.
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