Sunoco (NYSE:SUN) versus Western Midstream Partners (NYSE:WES) Head to Head Contrast

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

Valuation and Earnings

This table compares Sunoco 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
Sunoco	$22.69 billion	0.35	$866.00 million	$2.03	25.58
Western Midstream Partners	$3.67 billion	3.97	$1.57 billion	$3.25	11.75

Western Midstream Partners has lower revenue, but higher earnings 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.

Insider & Institutional Ownership

24.3% of Sunoco shares are owned by institutional investors. Comparatively, 84.8% of Western Midstream Partners 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 company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Sunoco and Western Midstream Partners, as provided by MarketBeat.

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

Sunoco currently has a consensus target price of $64.75, suggesting a potential upside of 24.69%. Western Midstream Partners has a consensus target price of $39.80, suggesting a potential upside of 4.22%. Given Sunoco’s stronger consensus rating and higher probable upside, equities analysts clearly believe Sunoco is more favorable than Western Midstream Partners.

Dividends

Sunoco pays an annual dividend of $3.64 per share and has a dividend yield of 7.0%. Western Midstream Partners pays an annual dividend of $3.64 per share and has a dividend yield of 9.5%. 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 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 has increased its dividend for 3 consecutive years and 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.

Profitability

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

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

Risk and Volatility

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

Summary

Western Midstream Partners beats Sunoco on 12 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 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.