Buckeye Partners (NYSE: BPL) and EnLink Midstream (NYSE:ENLC) are both mid-cap oils/energy companies, but which is the better business? We will compare the two companies based on the strength of their risk, institutional ownership, profitability, earnings, valuation, dividends and analyst recommendations.
Volatility & Risk
Buckeye Partners has a beta of 1.14, suggesting that its stock price is 14% more volatile than the S&P 500. Comparatively, EnLink Midstream has a beta of 2.58, suggesting that its stock price is 158% more volatile than the S&P 500.
Buckeye Partners pays an annual dividend of $5.05 per share and has a dividend yield of 11.2%. EnLink Midstream pays an annual dividend of $1.04 per share and has a dividend yield of 6.8%. Buckeye Partners pays out 151.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. EnLink Midstream pays out 89.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Buckeye Partners has raised its dividend for 15 consecutive years. Buckeye Partners is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This is a summary of current recommendations for Buckeye Partners and EnLink Midstream, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Buckeye Partners presently has a consensus price target of $60.09, indicating a potential upside of 33.30%. EnLink Midstream has a consensus price target of $17.92, indicating a potential upside of 17.72%. Given Buckeye Partners’ stronger consensus rating and higher possible upside, research analysts plainly believe Buckeye Partners is more favorable than EnLink Midstream.
This table compares Buckeye Partners and EnLink Midstream’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Institutional and Insider Ownership
70.5% of Buckeye Partners shares are owned by institutional investors. Comparatively, 33.7% of EnLink Midstream shares are owned by institutional investors. 0.4% of Buckeye Partners shares are owned by insiders. Comparatively, 1.2% of EnLink Midstream shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Valuation & Earnings
This table compares Buckeye Partners and EnLink Midstream’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Buckeye Partners||$3.65 billion||1.82||$478.80 million||$3.34||13.50|
|EnLink Midstream||$5.74 billion||0.48||$212.80 million||$1.16||13.12|
Buckeye Partners has higher earnings, but lower revenue than EnLink Midstream. EnLink Midstream is trading at a lower price-to-earnings ratio than Buckeye Partners, indicating that it is currently the more affordable of the two stocks.
Buckeye Partners beats EnLink Midstream on 13 of the 17 factors compared between the two stocks.
Buckeye Partners Company Profile
Buckeye Partners, L.P. (Buckeye) owns and operates a network of integrated assets providing midstream logistic solutions, primarily consisting of the transportation, storage, processing and marketing of liquid petroleum products. Its segments include Domestic Pipelines & Terminals, Global Marine Terminals and Merchant Services. As of December 31, 2016, the Domestic Pipelines & Terminals segment owned and operated approximately 6,000 miles of pipeline located primarily in the northeastern and upper Midwestern portions of the United States, and serviced approximately 110 delivery locations. The Global Marine Terminals segment provides marine accessible bulk storage and blending services, rail and truck rack loading/unloading, along with petroleum processing services in the East Coast and Gulf Coast regions of the United States and in the Caribbean. The Merchant Services segment is a wholesale distributor of petroleum products in the continental United States and in the Caribbean.
EnLink Midstream Company Profile
EnLink Midstream, LLC is an integrated midstream company. The Company’s assets consist of equity interests in EnLink Midstream Partners, LP (the Partnership) and EnLink Oklahoma Gas Processing, LP (EnLink Oklahoma T.O.). The Partnership is engaged in the gathering, transmission, processing and marketing of natural gas and natural gas liquids (NGLs), condensate and crude oil, as well as providing crude oil, condensate and brine services to producers. EnLink Oklahoma T.O., a partnership owned by the Partnership and the Company, is engaged in the gathering and processing of natural gas. The Partnership’s segments include Texas, Oklahoma, Louisiana, Crude and Condensate, and Corporate. The Partnership connects the wells of producers in its market areas to its gathering systems, processes natural gas to remove NGLs, fractionates NGLs into purity products and markets those products for a fee, transports natural gas and provides natural gas to a range of markets.
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