Sunoco (NYSE: SUN) and Global Partners (NYSE:GLP) are both oils/energy companies, but which is the superior stock? We will contrast the two businesses based on the strength of their profitability, dividends, analyst recommendations, earnings, institutional ownership, risk and valuation.
Institutional & Insider Ownership
27.5% of Sunoco shares are held by institutional investors. Comparatively, 47.3% of Global Partners shares are held by institutional investors. 41.5% of Global Partners shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
This table compares Sunoco and Global Partners’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a summary of current ratings and price targets for Sunoco and Global Partners, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Sunoco currently has a consensus price target of $31.00, suggesting a potential downside of 0.06%. Global Partners has a consensus price target of $18.00, suggesting a potential upside of 3.75%. Given Global Partners’ higher probable upside, analysts plainly believe Global Partners is more favorable than Sunoco.
Risk & Volatility
Sunoco has a beta of 0.56, indicating that its stock price is 44% less volatile than the S&P 500. Comparatively, Global Partners has a beta of 1.07, indicating that its stock price is 7% more volatile than the S&P 500.
Sunoco pays an annual dividend of $3.30 per share and has a dividend yield of 10.6%. Global Partners pays an annual dividend of $1.85 per share and has a dividend yield of 10.7%. Sunoco pays out -37.4% of its earnings in the form of a dividend. Global Partners pays out -39.1% 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. Global Partners is clearly the better dividend stock, given its higher yield and lower payout ratio.
Valuation & Earnings
This table compares Sunoco and Global Partners’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Sunoco||$16.72 billion||0.18||$672.28 million||($8.83)||-3.51|
|Global Partners||$8.76 billion||0.07||$224.50 million||($4.73)||-3.67|
Sunoco has higher revenue and earnings than Global Partners. Global Partners is trading at a lower price-to-earnings ratio than Sunoco, indicating that it is currently the more affordable of the two stocks.
Global Partners beats Sunoco on 8 of the 15 factors compared between the two stocks.
Sunoco Company Profile
Sunoco LP is engaged in the retail sale of motor fuels and merchandise through its Company-operated convenience stores and retail fuel sites, as well as the wholesale distribution of motor fuels to convenience stores, independent dealers, commercial customers and distributors. The Company operates through two segments: wholesale and retail. The Wholesale segment sells motor fuel to its retail segment and external customers. The Retail segment operates convenience stores selling a range of merchandise, food items, services and motor fuel. As of December 31, 2016, the Company operated approximately 1,345 convenience stores and fuel outlets in over 20 states, offering merchandise, food service, motor fuel and other services.
Global Partners Company Profile
Global Partners LP is a midstream logistics and marketing company. It is engaged in the purchasing, selling, storing and logistics of transporting petroleum and related products, including gasoline and gasoline blendstocks, distillates, residual oil, renewable fuels, crude oil, natural gas and propane. Its segments include Wholesale, Gasoline Distribution and Station Operations and Commercial. In Wholesale segment, the Company engages in the logistics of selling, gathering, storage and transportation of refined petroleum products, renewable fuels, crude oil and propane. In Gasoline Distribution and Station Operations segment, gasoline distribution includes sales of branded and unbranded gasoline to gasoline station operators and sub-jobbers. The Commercial segment includes sales and deliveries to end user customers in the public sector and to commercial and industrial end users of unbranded gasoline, home heating oil, diesel, kerosene, residual oil, bunker fuel and natural gas.
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