Arc Logistics Partners (NYSE: ARCX) and Marathon Petroleum (NYSE:MPC) are both energy companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, valuation, analyst recommendations, earnings, institutional ownership and profitability.
Insider and Institutional Ownership
44.4% of Arc Logistics Partners shares are owned by institutional investors. Comparatively, 80.8% of Marathon Petroleum shares are owned by institutional investors. 1.1% of Marathon Petroleum shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Arc Logistics Partners has a beta of 0.76, suggesting that its share price is 24% less volatile than the S&P 500. Comparatively, Marathon Petroleum has a beta of 1.5, suggesting that its share price is 50% more volatile than the S&P 500.
Arc Logistics Partners pays an annual dividend of $1.76 per share and has a dividend yield of 10.7%. Marathon Petroleum pays an annual dividend of $1.60 per share and has a dividend yield of 2.3%. 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. Marathon Petroleum pays out 50.0% of its earnings in the form of a dividend. Arc Logistics Partners has raised its dividend for 7 consecutive years. Arc Logistics Partners is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This is a summary of current ratings and recommmendations for Arc Logistics Partners and Marathon Petroleum, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Arc Logistics Partners||0||2||0||0||2.00|
Arc Logistics Partners presently has a consensus price target of $16.50, suggesting a potential downside of 0.06%. Marathon Petroleum has a consensus price target of $74.30, suggesting a potential upside of 9.01%. Given Marathon Petroleum’s stronger consensus rating and higher possible upside, analysts plainly believe Marathon Petroleum is more favorable than Arc Logistics Partners.
This table compares Arc Logistics Partners and Marathon Petroleum’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Arc Logistics Partners||4.36%||-0.11%||0.75%|
Earnings & Valuation
This table compares Arc Logistics Partners and Marathon Petroleum’s gross 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||3.06||$15.04 million||$0.41||40.27|
|Marathon Petroleum||$75.37 billion||0.44||$3.43 billion||$3.20||21.30|
Marathon Petroleum has higher revenue and earnings than Arc Logistics Partners. Marathon Petroleum 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.
Marathon Petroleum beats Arc Logistics Partners on 13 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 Marathon Petroleum
Marathon Petroleum Corporation is engaged in refining, marketing, retail and transportation businesses in the United States and the largest east of the Mississippi. The Company operates through three segments: Refining & Marketing; Speedway; and Midstream. The Refining & Marketing segment refines crude oil and other feedstocks at the Company’s seven refineries in the Gulf Coast and Midwest regions of the United States. Its Speedway segment sells transportation fuels and convenience products in the retail market in the Midwest, East Coast and Southeast regions of the United States. The Company’s Midstream is engaged in the operations of MPLX LP and certain other related operations. It gathers, processes and transports natural gas, natural gas liquids (NGLs), crude oil and refined products. MPLX is a limited partnership which owns, operates, develops and acquires midstream energy infrastructure assets.
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