Better Buy: Calumet Specialty Products Partners LP vs. Valero Energy

While Calumet Specialty Products Partners (NASDAQ: CLMT) and Valero Energy (NYSE: VLO) both operate refineries, these two companies couldn't be more dissimilar. That's because Calumet is a master limited partnership that makes more money manufacturing specialty products than it does on refining. Meanwhile, Valero is the largest independent refiner in the country. Further, it owns a separate MLP, Valero Energy Partners (NYSE: VLP), which operates pipelines and storage facilities.

Those different focuses aside, an even more glaring discrepancy between these two is their financial situations. Calumet's balance sheet is a disaster, which forced it to suspend shareholder distributions last year, while Valero maintains a top-tier financial position that has allowed it to continue increasing cash returns to investors. Those reasons, when combined with its visible growth prospects, make Valero the clear better buy.

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Source: Fool.com