Critical Comparison: Alliance Resource Partners (NASDAQ:ARLP) and PBF Energy (NYSE:PBF)

PBF Energy (NYSE:PBF) and Alliance Resource Partners (NASDAQ:ARLP) are both mid-cap energy companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, analyst recommendations, valuation, profitability, institutional ownership, risk and earnings.

Dividends

PBF Energy pays an annual dividend of $1.10 per share and has a dividend yield of 1.4%. Alliance Resource Partners pays an annual dividend of $2.40 per share and has a dividend yield of 9.8%. PBF Energy pays out 9.7% of its earnings in the form of a dividend. Alliance Resource Partners pays out 117.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. PBF Energy has raised its dividend for 2 consecutive years.

Analyst Recommendations

This is a breakdown of current ratings for PBF Energy and Alliance Resource Partners, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PBF Energy	3	8	3	1	2.13
Alliance Resource Partners	0	1	2	0	2.67

PBF Energy presently has a consensus target price of $59.55, indicating a potential downside of 22.80%. Given PBF Energy’s higher probable upside, equities analysts clearly believe PBF Energy is more favorable than Alliance Resource Partners.

Valuation & Earnings

This table compares PBF Energy and Alliance Resource Partners”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PBF Energy	$29.33 billion	0.31	-$158.50 million	$11.30	6.83
Alliance Resource Partners	$2.17 billion	1.44	$311.16 million	$2.05	11.89

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

Insider and Institutional Ownership

96.3% of PBF Energy shares are owned by institutional investors. Comparatively, 18.1% of Alliance Resource Partners shares are owned by institutional investors. 5.5% of PBF Energy shares are owned by company insiders. Comparatively, 16.8% of Alliance Resource Partners shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares PBF Energy and Alliance Resource Partners’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
PBF Energy	3.94%	11.27%	4.67%
Alliance Resource Partners	12.25%	17.70%	11.12%

Volatility & Risk

PBF Energy has a beta of 0.09, suggesting that its share price is 91% less volatile than the S&P 500. Comparatively, Alliance Resource Partners has a beta of 0.21, suggesting that its share price is 79% less volatile than the S&P 500.

Summary

Alliance Resource Partners beats PBF Energy on 10 of the 18 factors compared between the two stocks.

About PBF Energy

PBF Energy Inc., through its subsidiaries, engages in refining and supplying petroleum products. The company operates in two segments, Refining and Logistics. It produces gasoline, ultra-low-sulfur diesel, heating oil, diesel fuel, jet fuel, lubricants, petrochemicals, and asphalt, as well as unbranded transportation fuels, petrochemical feedstocks, blending components, and other petroleum products from crude oil. The company sells its products in Northeast, Midwest, Gulf Coast, and West Coast of the United States, as well as in other regions of the United States, Canada, Mexico, and internationally. It is also involved in the provision of various rail, truck, and marine terminaling services, as well as pipeline transportation and storage services. The company was founded in 2008 and is based in Parsippany, New Jersey.

About Alliance Resource Partners

Alliance Resource Partners, L.P., a diversified natural resource company, produces and markets coal primarily to utilities and industrial users in the United States. The company operates through four segments: Illinois Basin Coal Operations, Appalachia Coal Operations, Oil & Gas Royalties, and Coal Royalties. It produces a range of thermal and metallurgical coal with sulfur and heat contents. The company operates seven underground mining complexes in Illinois, Indiana, Kentucky, Maryland, Pennsylvania, and West Virginia. In addition, it owns and leases oil and gas mineral interests and equity interests; and leases its coal mineral reserves and resources to its mining complexes; and leases land and operates a coal loading terminal on the Ohio River at Mt. Vernon, Indiana. Further, the company offers various mining technology products and services, including data network, communication and tracking systems, mining proximity detection systems, industrial collision avoidance systems, and data and analytics software. It also exports its products. The company was founded in 1971 and is headquartered in Tulsa, Oklahoma.