Enterprise Products Partners (NYSE: EPD) and ONEOK (NYSE:OKE) are both large-cap energy companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, dividends, risk, valuation, profitability, analyst recommendations and institutional ownership.
Risk and Volatility
Enterprise Products Partners has a beta of 0.81, meaning that its stock price is 19% less volatile than the S&P 500. Comparatively, ONEOK has a beta of 1.26, meaning that its stock price is 26% more volatile than the S&P 500.
Earnings and Valuation
This table compares Enterprise Products Partners and ONEOK’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Enterprise Products Partners||$29.24 billion||1.94||$2.80 billion||$1.11||23.65|
|ONEOK||$8.92 billion||2.62||$352.03 million||$1.60||35.64|
Enterprise Products Partners has higher revenue and earnings than ONEOK. Enterprise Products Partners is trading at a lower price-to-earnings ratio than ONEOK, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
36.7% of Enterprise Products Partners shares are held by institutional investors. Comparatively, 66.2% of ONEOK shares are held by institutional investors. 37.5% of Enterprise Products Partners shares are held by insiders. Comparatively, 1.0% of ONEOK shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Enterprise Products Partners pays an annual dividend of $1.70 per share and has a dividend yield of 6.5%. ONEOK pays an annual dividend of $3.08 per share and has a dividend yield of 5.4%. Enterprise Products Partners pays out 153.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. ONEOK pays out 192.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Enterprise Products Partners has raised its dividend for 15 consecutive years and ONEOK has raised its dividend for 19 consecutive years. Enterprise Products Partners is clearly the better dividend stock, given its higher yield and lower payout ratio.
This is a summary of current ratings and target prices for Enterprise Products Partners and ONEOK, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Enterprise Products Partners||0||1||15||0||2.94|
Enterprise Products Partners presently has a consensus target price of $31.12, indicating a potential upside of 18.53%. ONEOK has a consensus target price of $59.64, indicating a potential upside of 4.59%. Given Enterprise Products Partners’ stronger consensus rating and higher probable upside, research analysts clearly believe Enterprise Products Partners is more favorable than ONEOK.
This table compares Enterprise Products Partners and ONEOK’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Enterprise Products Partners||9.57%||12.53%||5.47%|
Enterprise Products Partners beats ONEOK on 11 of the 17 factors compared between the two stocks.
About Enterprise Products Partners
Enterprise Products Partners L.P. (Enterprise) is a provider of midstream energy services to producers and consumers of natural gas, natural gas liquids (NGLs), crude oil, petrochemicals and refined products in North America. The Company’s segments include NGL Pipelines & Services; Crude Oil Pipelines & Services; Natural Gas Pipelines & Services, and Petrochemical & Refined Products Services. The Company’s midstream energy operations include natural gas gathering, treating, processing, transportation and storage; NGL transportation, fractionation, storage, and import and export terminals, including liquefied petroleum gas (LPG); crude oil gathering, transportation, storage and terminals; petrochemical and refined products transportation, storage, export and import terminals, and related services, and a marine transportation business that operates primarily on the United States inland and Intracoastal Waterway systems.
ONEOK, Inc. is an energy midstream service provider in the United States. The Company owns and operates natural gas liquids (NGL) systems, and is engaged in the gathering, processing, storage and transportation of natural gas. THe Company’s operations include a 38,000-mile integrated network of NGL and natural gas pipelines, processing plants, fractionators and storage facilities in the Mid-Continent, Williston, Permian and Rocky Mountain regions. The Company operates through three business segments. The Natural Gas Gathering and Processing segment provides midstream services to contracted producers in North Dakota, Montana, Wyoming, Kansas and Oklahoma. The Natural Gas Liquids segment owns and operates facilities that gather, fractionate, treat and distribute NGLs and store NGL products primarily in the Mid-Continental, Permian Basin and the Rocky Mountain regions. The Natural Gas Pipelines segment provides transportation and storage services to end users.
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