Sunoco (NYSE: SUN) and Macquarie Infrastructure (NYSE:MIC) are both mid-cap oils/energy companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, profitability, dividends, analyst recommendations, valuation and institutional ownership.
Insider & Institutional Ownership
29.7% of Sunoco shares are held by institutional investors. Comparatively, 76.7% of Macquarie Infrastructure shares are held by institutional investors. 6.9% of Macquarie Infrastructure shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
This table compares Sunoco and Macquarie Infrastructure’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Valuation and Earnings
This table compares Sunoco and Macquarie Infrastructure’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Sunoco||$11.72 billion||0.23||$149.00 million||$2.29||11.73|
|Macquarie Infrastructure||$1.81 billion||1.75||$451.20 million||$2.56||14.55|
Macquarie Infrastructure has lower revenue, but higher earnings than Sunoco. Sunoco is trading at a lower price-to-earnings ratio than Macquarie Infrastructure, indicating that it is currently the more affordable of the two stocks.
Sunoco pays an annual dividend of $3.30 per share and has a dividend yield of 12.3%. Macquarie Infrastructure pays an annual dividend of $4.00 per share and has a dividend yield of 10.7%. Sunoco pays out 144.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Macquarie Infrastructure pays out 156.3% 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 2 consecutive years and Macquarie Infrastructure has increased its dividend for 6 consecutive years. Sunoco is clearly the better dividend stock, given its higher yield and lower payout ratio.
Volatility and Risk
Sunoco has a beta of 0.63, suggesting that its stock price is 37% less volatile than the S&P 500. Comparatively, Macquarie Infrastructure has a beta of 1.22, suggesting that its stock price is 22% more volatile than the S&P 500.
This is a summary of recent ratings and price targets for Sunoco and Macquarie Infrastructure, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Sunoco presently has a consensus target price of $31.17, indicating a potential upside of 16.00%. Macquarie Infrastructure has a consensus target price of $50.25, indicating a potential upside of 34.86%. Given Macquarie Infrastructure’s higher possible upside, analysts clearly believe Macquarie Infrastructure is more favorable than Sunoco.
Macquarie Infrastructure beats Sunoco on 10 of the 16 factors compared between the two stocks.
Sunoco Company Profile
Sunoco LP, together with its subsidiaries, engages in the wholesale distribution and retail sale of motor fuels primarily in the United States. The company operates through two segments, Wholesale and Retail. It serves convenience stores and commission agent locations, contracted independent convenience store operators, and other commercial customers. The company also distributes other petroleum products, including propane and lubricating oils; and leases or subleases real estate properties. As of December 31, 2017, it operated 1,348 convenience stores and fuel outlets offering merchandise, food service, motor fuel, and other services in approximately 20 states. Sunoco GP LLC serves as the general partner of the company. The company was formerly known as Susser Petroleum Partners LP and changed its name to Sunoco LP in October 2014. Sunoco LP is headquartered in Dallas, Texas.
Macquarie Infrastructure Company Profile
Macquarie Infrastructure Corporation owns and operates a portfolio of businesses that provide services to other businesses, government agencies, and individuals. It operates through four segments: International-Matex Tank Terminals (IMTT), Atlantic Aviation, Contracted Power (CP), and MIC Hawaii. The IMTT segment offers bulk liquid storage, handling, and other services for petroleum products, chemicals, renewable fuels, and vegetable and animal oils through a network of 19 marine terminals, including 17 in the United States and 2 in Canada. This segment also provides environmental emergency response, industrial, and waste transportation and disposal services. The Atlantic Aviation segment offers fuel delivery, de-icing, aircraft parking, and hangar rental services to owners/operators of jet aircraft, as well as for commercial, military, freight, and government aviation customers. The CP segment generates electricity through wind, solar, and gas-fired facilities. As of December 31, 2017, this segment had interests in 7 solar power generating facilities with an aggregate generating capacity of 142 megawatts (MW) located in Arizona, California, Texas, Minnesota, and Utah; 2 wind power generating facilities with an aggregate generating capacity of 203 MW situated in Idaho and New Mexico; and gas-fired facility with a generating capacity of 512 MW located in Bayonne, New Jersey. The MIC Hawaii segment processes, distributes, and sells synthetic and renewable natural gas; and distributes and sells liquefied natural gas and petroleum gas to residential, commercial, hospitality, military, and wholesale customers, as well as to the public sector in Oahu, Hawaii, Maui, Kauai, Molokai, and Lanai. This segment's products are used in various commercial and residential applications, such as water heating, drying, cooking, power generation, and other uses, as well as for use in specialty vehicles. The company was founded in 2004 and is based in New York, New York.
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