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.

Image source: Getty Images.

Source: Fool.com