Head to Head Survey: Western Midstream Partners (NYSE:WES) and Sunoco (NYSE:SUN)

Western Midstream Partners (NYSE:WES) and Sunoco (NYSE:SUN) are both energy companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, valuation, dividends, institutional ownership, earnings, risk and analyst recommendations.

Valuation and Earnings

This table compares Western Midstream Partners and Sunoco”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	$3.61 billion	3.97	$1.57 billion	$3.25	11.55
Sunoco	$22.69 billion	0.34	$866.00 million	$2.03	25.01

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

Institutional and Insider Ownership

84.8% of Western Midstream Partners shares are owned by institutional investors. Comparatively, 24.3% of Sunoco shares are owned by institutional investors. 0.0% of Western Midstream Partners shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current recommendations and price targets for Western Midstream Partners and Sunoco, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Western Midstream Partners	2	2	1	0	1.80
Sunoco	0	0	4	0	3.00

Western Midstream Partners presently has a consensus target price of $39.80, suggesting a potential upside of 6.01%. Sunoco has a consensus target price of $64.75, suggesting a potential upside of 27.51%. Given Sunoco’s stronger consensus rating and higher probable upside, analysts plainly believe Sunoco is more favorable than Western Midstream Partners.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Western Midstream Partners	34.45%	37.70%	9.97%
Sunoco	2.02%	10.57%	3.05%

Dividends

Western Midstream Partners pays an annual dividend of $3.64 per share and has a dividend yield of 9.7%. Sunoco pays an annual dividend of $3.64 per share and has a dividend yield of 7.2%. Western Midstream Partners pays out 112.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Sunoco pays out 179.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Western Midstream Partners has increased its dividend for 5 consecutive years and Sunoco has increased 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.

Volatility and Risk

Western Midstream Partners has a beta of 1.13, indicating that its share price is 13% more volatile than the S&P 500. Comparatively, Sunoco has a beta of 0.6, indicating that its share price is 40% less volatile than the S&P 500.

Summary

Western Midstream Partners beats Sunoco on 12 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 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.