Analyzing Western Midstream Partners (NYSE:WES) & HF Sinclair (NYSE:DINO)

Western Midstream Partners (NYSE:WES) and HF Sinclair (NYSE:DINO) are both large-cap energy companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, institutional ownership, profitability, valuation, analyst recommendations, risk and dividends.

Earnings and Valuation

This table compares Western Midstream Partners and HF Sinclair”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Western Midstream Partners	$3.84 billion	4.91	$1.18 billion	$3.18	14.36
HF Sinclair	$26.87 billion	0.80	$579.00 million	$10.48	11.54

Western Midstream Partners has higher earnings, but lower revenue than HF Sinclair. HF Sinclair is trading at a lower price-to-earnings ratio than Western Midstream Partners, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

84.8% of Western Midstream Partners shares are held by institutional investors. Comparatively, 88.3% of HF Sinclair shares are held by institutional investors. 0.0% of Western Midstream Partners shares are held by insiders. Comparatively, 0.3% of HF Sinclair shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Volatility and Risk

Western Midstream Partners has a beta of 0.74, indicating that its share price is 26% less volatile than the S&P 500. Comparatively, HF Sinclair has a beta of 0.72, indicating that its share price is 28% less volatile than the S&P 500.

Dividends

Western Midstream Partners pays an annual dividend of $3.72 per share and has a dividend yield of 8.1%. HF Sinclair pays an annual dividend of $2.10 per share and has a dividend yield of 1.7%. Western Midstream Partners pays out 117.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. HF Sinclair pays out 20.0% of its earnings in the form of a dividend. Western Midstream Partners has raised its dividend for 5 consecutive years and HF Sinclair has raised its dividend for 3 consecutive years. Western Midstream Partners is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of recent ratings for Western Midstream Partners and HF Sinclair, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Western Midstream Partners	0	6	3	2	2.64
HF Sinclair	1	7	6	2	2.56

Western Midstream Partners currently has a consensus target price of $49.89, suggesting a potential upside of 9.22%. HF Sinclair has a consensus target price of $100.00, suggesting a potential downside of 17.30%. Given Western Midstream Partners’ stronger consensus rating and higher probable upside, equities analysts clearly believe Western Midstream Partners is more favorable than HF Sinclair.

Profitability

This table compares Western Midstream Partners and HF Sinclair’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Western Midstream Partners	29.44%	33.13%	8.74%
HF Sinclair	6.13%	18.21%	9.96%

Summary

Western Midstream Partners beats HF Sinclair on 10 of the 17 factors compared between the two stocks.

About Western Midstream Partners

Western Midstream Partners, LP, together with its subsidiaries, operates as a midstream energy company primarily in the United States. It is involved in gathering, compressing, treating, processing, and transporting natural gas; gathering, stabilizing, and transporting condensate, natural gas liquids (NGLs), and crude oil; and gathering and disposing produced water. The company also buys and sells natural gas, NGLs, and condensate. It operates assets located in Texas, New Mexico, the Rocky Mountains, and North-central Pennsylvania. Western Midstream Holdings, LLC operates as the general partner of the company. The company was formerly known as Western Gas Equity Partners, LP and changed its name to Western Midstream Partners, LP in February 2019. Western Midstream Partners, LP was incorporated in 2007 and is based in The Woodlands, Texas.

About HF Sinclair

HF Sinclair Corporation operates as an independent energy company. The company produces and markets gasoline, diesel fuel, jet fuel, renewable diesel, specialty lubricant products, specialty chemicals, specialty and modified asphalt, and others. It owns and operates refineries located in Kansas, Oklahoma, New Mexico, Utah, Washington, and Wyoming; and markets its refined products principally in the Southwest United States and Rocky Mountains, Pacific Northwest, and in other neighboring Plains states. In addition, the company supplies fuels to approximately 1,500 independent Sinclair branded stations and licenses the use of the Sinclair brand at approximately 300 additional locations. Further, it produces base oils and other specialized lubricants; and provides petroleum product and crude oil transportation, terminalling, storage, and throughput services to the petroleum sector. HF Sinclair Corporation is headquartered in Dallas, Texas.