Suburban Propane Partners (NYSE:SPH) vs. Western Midstream Partners (NYSE:WES) Critical Comparison

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

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Suburban Propane Partners and Western Midstream Partners, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Suburban Propane Partners	1	0	0	0	1.00
Western Midstream Partners	2	3	1	0	1.83

Suburban Propane Partners currently has a consensus target price of $17.00, suggesting a potential downside of 10.98%. Western Midstream Partners has a consensus target price of $39.83, suggesting a potential upside of 3.82%. Given Western Midstream Partners’ stronger consensus rating and higher possible upside, analysts clearly believe Western Midstream Partners is more favorable than Suburban Propane Partners.

Volatility and Risk

Suburban Propane Partners has a beta of 0.17, suggesting that its stock price is 83% less volatile than the S&P 500. Comparatively, Western Midstream Partners has a beta of 1.1, suggesting that its stock price is 10% more volatile than the S&P 500.

Insider & Institutional Ownership

30.9% of Suburban Propane Partners shares are owned by institutional investors. Comparatively, 84.8% of Western Midstream Partners shares are owned by institutional investors. 2.1% of Suburban Propane Partners shares are owned by company insiders. Comparatively, 0.0% of Western Midstream Partners shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Suburban Propane Partners	6.65%	15.98%	4.06%
Western Midstream Partners	35.79%	38.52%	10.25%

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Suburban Propane Partners	$1.33 billion	0.93	$74.17 million	$1.44	13.26
Western Midstream Partners	$3.61 billion	4.06	$1.57 billion	$3.35	11.45

Western Midstream Partners has higher revenue and earnings than Suburban Propane Partners. Western Midstream Partners 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.

Dividends

Suburban Propane Partners pays an annual dividend of $1.30 per share and has a dividend yield of 6.8%. Western Midstream Partners pays an annual dividend of $3.64 per share and has a dividend yield of 9.5%. 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. Western Midstream Partners pays out 108.7% 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. Western Midstream Partners is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Western Midstream Partners beats Suburban Propane Partners on 14 of the 17 factors compared between the two stocks.

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.

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.