Head-To-Head Comparison: Alliance Resource Partners (NASDAQ:ARLP) and Ultrapar Participacoes (NYSE:UGP)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Ultrapar Participacoes	2.28%	18.84%	7.17%
Alliance Resource Partners	12.25%	17.70%	11.12%

Volatility & Risk

Ultrapar Participacoes has a beta of 0.71, indicating that its stock price is 29% less volatile than the S&P 500. Comparatively, Alliance Resource Partners has a beta of 0.34, indicating that its stock price is 66% less volatile than the S&P 500.

Dividends

Ultrapar Participacoes pays an annual dividend of $0.31 per share and has a dividend yield of 4.0%. Alliance Resource Partners pays an annual dividend of $2.40 per share and has a dividend yield of 9.2%. Ultrapar Participacoes pays out 50.8% 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.

Valuation & Earnings

This table compares Ultrapar Participacoes and Alliance Resource Partners”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ultrapar Participacoes	$25.51 billion	0.34	$439.48 million	$0.61	12.70
Alliance Resource Partners	$2.19 billion	1.53	$311.16 million	$2.05	12.75

Ultrapar Participacoes has higher revenue and earnings than Alliance Resource Partners. Ultrapar Participacoes 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 & Institutional Ownership

3.6% of Ultrapar Participacoes shares are held by institutional investors. Comparatively, 18.1% of Alliance Resource Partners shares are held by institutional investors. 1.8% of Ultrapar Participacoes shares are held by insiders. Comparatively, 16.8% of Alliance Resource Partners 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.

Analyst Recommendations

This is a summary of current recommendations and price targets for Ultrapar Participacoes and Alliance Resource Partners, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ultrapar Participacoes	0	5	3	1	2.56
Alliance Resource Partners	0	1	2	0	2.67

Ultrapar Participacoes presently has a consensus price target of $6.54, suggesting a potential downside of 15.56%. Given Ultrapar Participacoes’ higher possible upside, research analysts plainly believe Ultrapar Participacoes is more favorable than Alliance Resource Partners.

Summary

Alliance Resource Partners beats Ultrapar Participacoes on 9 of the 17 factors compared between the two stocks.

About Ultrapar Participacoes

Ultrapar Participações S.A., through its subsidiaries, operates in the energy and infrastructure business in Brazil. The company distributes liquefied petroleum gas to residential, commercial, and industrial consumers, in addition to renewable electricity and compressed natural gas. It also operates in the distribution and marketing of gasoline, ethanol, diesel, fuel oil, kerosene, natural gas for vehicles, and lubricants; and holds AmPm convenience stores and provides JetOil lubricant services. In addition, the company operates liquid bulk storage terminals. Further, it offers digital payments services, combining the abastece aí app and the loyalty program Km de Vantagens. It also exports its products and services to customers in Europe, Singapore, the United States, Canada, other Latin American countries, and internationally. The company was founded in 1937 and is headquartered in São Paulo, Brazil.

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.