Delek Logistics Partners, LP (NYSE: DKL)

Sector: Energy Industry: Oil & Gas Refining & Marketing CIK: 0001552797
Market Cap 1.32 Bn
P/B -10.13
P/E 24.12
P/S 2.30
ROIC (Qtr) 7.97
Div Yield % 7.42
Rev 1y % (Qtr) 22.05
Total Debt (Qtr) 2.30 Bn
Debt/Equity (Qtr) 131.41
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About

Delek Logistics Partners, LP (DKL) operates in the energy industry, specifically in the midstream sector, where it is a significant player. The company's main business activities encompass the transportation, storage, and marketing of crude oil, refined products, and natural gas liquids. As a subsidiary of Delek Holdings, a publicly traded company, Delek Logistics Partners LP owns a substantial portion of the partnership's common units. The company's operations span across various segments, including the Transportation and Storage segment, the...

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Investment thesis

Bull case

  • Operating cash flow of 243.81M provides strong 37.77x coverage of stock compensation 6.46M, indicating sustainable incentive practices.
  • Strong operating cash flow of 243.81M provides 7.70x coverage of SG&A expenses 31.65M, showing efficient operational cost management.
  • Robust tangible asset base of 2.36B provides 188.08x coverage of working capital 12.56M, indicating strong operational backing.
  • Operating cash flow of 243.81M provides solid 0.66x coverage of current liabilities 370.23M, showing strong operational health.
  • Operating cash flow of 243.81M provides strong 13.08x coverage of inventory 18.64M, indicating efficient inventory management.

Bear case

  • Operating cash flow of 243.81M barely covers its investment activities of (481.71M), with a coverage ratio of -0.51, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 243.81M provides thin coverage of dividend payments of (234.85M) with a -1.04 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 6.91M provide limited coverage of acquisition spending of (204.22M), which is -0.03x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • High receivables of 334.18M relative to inventory of 18.64M (17.93 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • Short-term investments of 21.63M significantly exceed cash reserves of 6.91M, which is 3.13x, indicating potentially excessive yield-seeking behavior at the expense of liquidity.

Segments Breakdown of Revenue (2024)

Segments Breakdown of Revenue (2024)

Peer comparison

Companies in the Oil & Gas Refining & Marketing
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 MPC Marathon Petroleum Corp 142.92 Bn 53.05 1.86 34.20 Bn
2 VLO Valero Energy Corp/Tx 79.27 Bn 8.41 0.46 10.58 Bn
3 PSX Phillips 66 70.22 Bn 27.51 0.54 21.76 Bn
4 SUN Sunoco LP 5.94 Bn 11.81 0.45 10.07 Bn
5 DINO HF Sinclair Corp 5.65 Bn 289.25 1.17 3.16 Bn
6 PBF PBF Energy Inc. 3.87 Bn -24.43 0.13 2.90 Bn
7 DK Delek US Holdings, Inc. 2.42 Bn 7.69 0.13 3.59 Bn
8 CVI Cvr Energy Inc 2.28 Bn 13.73 0.31 1.83 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.63 0.76
EV to Cash from Ops. EV/CFO 19.05 8.58
EV to Debt EV to Debt 0.76 2.22
EV to EBIT EV/EBIT 16.98 10.87
EV to EBITDA EV/EBITDA 14.48 9.19
EV to Free Cash Flow [EV/FCF] EV/FCF 23.58 10.02
EV to Market Cap EV to Market Cap 1.32 1.76
EV to Revenue EV/Rev 3.02 0.77
Price to Book Value [P/B] P/B -10.13 6.86
Price to Earnings [P/E] P/E 24.12 34.12
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.69 -0.72
Dividend Payout Ratio % Div Payout % (Qtr) 144.00 28.49
Dividend per Basic Share Div per Share (Qtr) 4.44 1.75
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) -654.13 -37.85
Interest Coverage Int. cover (Qtr) 1.98 1.50
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -155.38 -33.62
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -5.54 150.03
Dividend Growth (1y) % Div 1y % (Qtr) 37.95 1.78
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 19.12 -40.63
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -4.71 451.72
EBIT Growth (1y) % EBIT 1y % (Qtr) 18.67 -35.27
EBT Growth (1y) % EBT 1y % (Qtr) 26.50 -53.20
EPS Growth (1y) % EPS 1y % (Qtr) 8.83 -26.82
FCF Growth (1y) % FCF 1y % (Qtr) -122.47 12.55
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -18.13 31.60
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.35 2.36
Cash Payout Ratio Cash Payout (Qtr) 0.45 0.42
Cash Ratio Cash Ratio (Qtr) 0.02 0.39
Current Ratio Curr Ratio (Qtr) 1.03 1.41
Debt to Equity Ratio Debt/Equity (Qtr) 131.41 10.15
Interest Cover Ratio Int Coverage (Qtr) 1.98 1.50
Times Interest Earned Times Interest Earned (Qtr) 1.98 1.50
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 47.10 6.34
EBIT Margin % EBIT Margin % (Qtr) 34.57 1.61
EBT Margin % EBT Margin % (Qtr) 17.08 -2.36
Gross Margin % Gross Margin % (Qtr) 22.80 12.04
Net Profit Margin % Net Margin % (Qtr) 16.90 -3.21