Taking everything into account, HEP scores 4 out of 10 in our fundamental rating. HEP was compared to 207 industry peers in the Oil, Gas & Consumable Fuels industry. HEP has a medium profitability rating, but doesn't score so well on its financial health evaluation. HEP is not valued too expensively and it also shows a decent growth rate.

Quickly go to:

1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

In the past year HEP was profitable.
In the past year HEP had a positive cash flow from operations.

1.2 Ratios

HEP's Return On Assets of 8.82% is in line compared to the rest of the industry. HEP outperforms 54.38% of its industry peers.
Looking at the Return On Equity, with a value of 26.66%, HEP is in the better half of the industry, outperforming 65.90% of the companies in the same industry.
HEP has a Return On Invested Capital of 7.61%. This is in the lower half of the industry: HEP underperforms 60.83% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for HEP is significantly below the industry average of 21.94%.

		Industry Rank	Sector Rank
ROA	8.82%
ROE	26.66%
ROIC	7.61%

ROA(3y)8.55%

ROA(5y)8.88%

ROE(3y)39.57%

ROE(5y)43.91%

ROIC(3y)7.99%

ROIC(5y)8.68%

1.3 Margins

With an excellent Profit Margin value of 40.91%, HEP belongs to the best of the industry, outperforming 80.18% of the companies in the same industry.
HEP's Profit Margin has improved in the last couple of years.
With a decent Operating Margin value of 42.93%, HEP is doing good in the industry, outperforming 74.65% of the companies in the same industry.
HEP's Operating Margin has declined in the last couple of years.
HEP's Gross Margin of 62.77% is fine compared to the rest of the industry. HEP outperforms 61.75% of its industry peers.
HEP's Gross Margin has declined in the last couple of years.

		Industry Rank	Sector Rank
OM	42.93%
PM (TTM)	40.91%
GM	62.77%

OM growth 3Y-6.27%

OM growth 5Y-3.66%

PM growth 3Y-2.17%

PM growth 5Y2.34%

GM growth 3Y-4.02%

GM growth 5Y-2.47%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), HEP is creating some value.
The number of shares outstanding for HEP has been increased compared to 1 year ago.
HEP has a better debt/assets ratio than last year.

2.2 Solvency

The Debt to FCF ratio of HEP is 4.77, which is a neutral value as it means it would take HEP, 4.77 years of fcf income to pay off all of its debts.
HEP's Debt to FCF ratio of 4.77 is in line compared to the rest of the industry. HEP outperforms 55.30% of its industry peers.
HEP has a Debt/Equity ratio of 1.71. This is a high value indicating a heavy dependency on external financing.
With a Debt to Equity ratio value of 1.71, HEP is not doing good in the industry: 81.11% of the companies in the same industry are doing better.

		Industry Rank	Sector Rank
Debt/Equity	1.71
Debt/FCF	4.77
Altman-Z	N/A

ROIC/WACC1.05

WACC7.28%

2.3 Liquidity

A Current Ratio of 1.15 indicates that HEP should not have too much problems paying its short term obligations.
With a Current ratio value of 1.15, HEP perfoms like the industry average, outperforming 48.39% of the companies in the same industry.
HEP has a Quick Ratio of 1.15. This is a normal value and indicates that HEP is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 1.15, HEP is in line with its industry, outperforming 57.14% of the companies in the same industry.

		Industry Rank	Sector Rank
Current Ratio	1.15
Quick Ratio	1.15

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WACC

Debt/Equity

How to determine the health of a company

Altman-Z score

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3. Growth

3.1 Past

The Earnings Per Share has grown by an nice 13.86% over the past year.
The Earnings Per Share has been decreasing by -1.41% on average over the past years.
The Revenue has grown by 11.56% in the past year. This is quite good.
HEP shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 3.80% yearly.

EPS 1Y (TTM)13.86%

EPS 3Y-0.56%

EPS 5Y-1.41%

EPS Q2Q%51.52%

Revenue 1Y (TTM)11.56%

Revenue growth 3Y0.91%

Revenue growth 5Y3.8%

Sales Q2Q%6.31%

3.2 Future

The Earnings Per Share is expected to grow by 9.09% on average over the next years. This is quite good.
The Revenue is expected to grow by 5.53% on average over the next years.

EPS Next Y7.71%

EPS Next 2Y11.49%

EPS Next 3Y9.09%

EPS Next 5YN/A

Revenue Next Year9.05%

Revenue Next 2Y7.91%

Revenue Next 3Y5.53%

Revenue Next 5YN/A

3.3 Evolution

The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

HEP is valuated reasonably with a Price/Earnings ratio of 10.82.
HEP's Price/Earnings is on the same level as the industry average.
When comparing the Price/Earnings ratio of HEP to the average of the S&P500 Index (27.21), we can say HEP is valued rather cheaply.
HEP is valuated reasonably with a Price/Forward Earnings ratio of 9.29.
Compared to the rest of the industry, the Price/Forward Earnings ratio of HEP is on the same level as its industry peers.
HEP's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 25.98.

		Industry Rank	Sector Rank
PE	10.82
Fwd PE	9.29

4.2 Price Multiples

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of HEP indicates a slightly more expensive valuation: HEP is more expensive than 70.51% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of HEP indicates a somewhat cheap valuation: HEP is cheaper than 68.66% of the companies listed in the same industry.

		Industry Rank	Sector Rank
P/FCF	8.05
EV/EBITDA	11.73

4.3 Compensation for Growth

HEP's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.

PEG (NY)1.4

PEG (5Y)N/A

EPS Next 2Y11.49%

EPS Next 3Y9.09%

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5. Dividend

5.1 Amount

With a Yearly Dividend Yield of 6.85%, HEP is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 3.73, HEP pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 1.81, HEP pays a better dividend.

		Industry Rank	Sector Rank
Dividend Yield	6.85%

5.2 History

The dividend of HEP decreases each year by -12.46%.
HEP has paid a dividend for at least 10 years, which is a reliable track record.
The dividend of HEP decreased recently.

Dividend Growth(5Y)-12.46%

Div Incr Years1

Div Non Decr Years1

5.3 Sustainability

HEP pays out 74.17% of its income as dividend. This is not a sustainable payout ratio.

DP74.17%

EPS Next 2Y11.49%

EPS Next 3Y9.09%

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Holly Energy Partners LP / HEP FAQ

What is the fundamental rating for HEP stock?

ChartMill assigns a fundamental rating of 4 / 10 to HEP.

What is the valuation status of Holly Energy Partners LP (HEP) stock?

ChartMill assigns a valuation rating of 5 / 10 to Holly Energy Partners LP (HEP). This can be considered as Fairly Valued.

How profitable is Holly Energy Partners LP (HEP) stock?

Holly Energy Partners LP (HEP) has a profitability rating of 5 / 10.

What is the valuation of Holly Energy Partners LP based on its PE and PB ratios?

The Price/Earnings (PE) ratio for Holly Energy Partners LP (HEP) is 10.82 and the Price/Book (PB) ratio is 2.89.

What is the financial health of Holly Energy Partners LP (HEP) stock?

The financial health rating of Holly Energy Partners LP (HEP) is 3 / 10.