Head to Head Comparison: Suburban Propane Partners (NYSE:SPH) and Sunoco (NYSE:SUN)

Sunoco (NYSE:SUN) and Suburban Propane Partners (NYSE:SPH) are both energy companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, profitability, earnings, valuation and risk.

Insider and Institutional Ownership

24.3% of Sunoco shares are owned by institutional investors. Comparatively, 30.9% of Suburban Propane Partners shares are owned by institutional investors. 1.3% of Suburban Propane Partners shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Volatility and Risk

Sunoco has a beta of 0.61, suggesting that its share price is 39% less volatile than the S&P 500. Comparatively, Suburban Propane Partners has a beta of 0.16, suggesting that its share price is 84% less volatile than the S&P 500.

Dividends

Sunoco pays an annual dividend of $3.59 per share and has a dividend yield of 6.5%. Suburban Propane Partners pays an annual dividend of $1.30 per share and has a dividend yield of 7.1%. Sunoco pays out 64.7% of its earnings in the form of a dividend. Suburban Propane Partners pays out 90.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Sunoco has increased its dividend for 3 consecutive years.

Analyst Recommendations

This is a summary of current ratings for Sunoco and Suburban Propane Partners, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sunoco	0	0	4	0	3.00
Suburban Propane Partners	1	0	0	0	1.00

Sunoco presently has a consensus target price of $64.75, suggesting a potential upside of 17.73%. Suburban Propane Partners has a consensus target price of $17.00, suggesting a potential downside of 7.51%. Given Sunoco’s stronger consensus rating and higher possible upside, equities analysts clearly believe Sunoco is more favorable than Suburban Propane Partners.

Valuation and Earnings

This table compares Sunoco and Suburban Propane Partners”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sunoco	$22.69 billion	0.37	$866.00 million	$5.55	9.91
Suburban Propane Partners	$1.33 billion	0.90	$74.17 million	$1.44	12.76

Sunoco has higher revenue and earnings than Suburban Propane Partners. Sunoco is trading at a lower price-to-earnings ratio than Suburban Propane Partners, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Sunoco and Suburban Propane Partners’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sunoco	3.80%	20.34%	5.94%
Suburban Propane Partners	6.65%	15.98%	4.06%

Summary

Sunoco beats Suburban Propane Partners on 11 of the 17 factors compared between the two stocks.

About Sunoco

Sunoco LP, together with its subsidiaries, distributes and retails motor fuels in the United States. It operates through two segments: Fuel Distribution and Marketing, and All Other. The Fuel Distribution and Marketing segment purchases motor fuel, as well as other petroleum products, such as propane and lubricating oil from independent refiners and oil companies and supplies it to company-operated retail stores, independently operated commission agents, and retail stores, as well as other commercial customers, including unbranded retail stores, other fuel distributors, school districts, municipalities, and other industrial customers. It owns and operates retail stores under the APlus and Aloha Island Mart brand names; and offers food, beverages, snacks, grocery and non-food merchandise, motor fuels, and other services. The All Other segment includes partnership credit card services, franchise royalties, and retail operations; and offers credit card processing, car washes, lottery, automated teller machines, money order, prepaid phone cards, and wireless services. The company was formerly known as Susser Petroleum Partners LP and changed its name to Sunoco LP in 2014. Sunoco LP was founded in 1886 and is headquartered in Dallas, Texas.

About Suburban Propane Partners

Suburban Propane Partners, L.P., through its subsidiaries, engages in the retail marketing and distribution of propane, renewable propane, fuel oil, and refined fuels in the United States. The company operates through four segments: Propane, Fuel Oil and Refined Fuels, Natural Gas and Electricity, and All Other. The Propane segment is involved in the retail distribution of propane for space heating, water heating, cooking, and clothes drying for use as a motor fuel in internal combustion engines to power over-the-road vehicles, forklifts, and stationary engines, as well as to fire furnaces as a cutting gas to the industrial customers; and for tobacco curing, crop drying, poultry brooding, and weed control in the agricultural markets. It also engages in the wholesale distribution of propane to industrial end users. Its Fuel Oil and Refined Fuels segment engages in the retail distribution of fuel oil, diesel, kerosene, and gasoline to residential and commercial customers for use in primarily as a source of heat in homes and buildings. The Natural Gas and Electricity segment markets natural gas and electricity to residential and commercial customers in the deregulated energy markets in New York and Pennsylvania. The All Other segment sells, installs, and services a range of home comfort equipment, including whole-house heating products, air cleaners, humidifiers, and space heaters. The company serves residential, commercial, industrial, and agricultural customers primarily in the east and west coast regions of the United States, as well as portions of the Midwest region of the United States and Alaska. Suburban Propane Partners, L.P. was founded in 1945 and is based in Whippany, New Jersey.