Teekay Tankers (NYSE:TNK – Get Free Report) and Kinder Morgan (NYSE:KMI – Get Free Report) are both energy companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, valuation, risk, analyst recommendations, institutional ownership, earnings and profitability.
Volatility & Risk
Teekay Tankers has a beta of -0.19, indicating that its stock price is 119% less volatile than the S&P 500. Comparatively, Kinder Morgan has a beta of 0.56, indicating that its stock price is 44% less volatile than the S&P 500.
Earnings & Valuation
This table compares Teekay Tankers and Kinder Morgan”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Teekay Tankers | $951.80 million | 3.66 | $351.19 million | $16.97 | 5.94 |
| Kinder Morgan | $16.94 billion | 4.11 | $3.06 billion | $1.56 | 20.06 |
Kinder Morgan has higher revenue and earnings than Teekay Tankers. Teekay Tankers is trading at a lower price-to-earnings ratio than Kinder Morgan, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a breakdown of recent ratings and price targets for Teekay Tankers and Kinder Morgan, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Teekay Tankers | 1 | 3 | 3 | 1 | 2.50 |
| Kinder Morgan | 0 | 10 | 8 | 0 | 2.44 |
Teekay Tankers presently has a consensus price target of $77.00, indicating a potential downside of 23.60%. Kinder Morgan has a consensus price target of $35.25, indicating a potential upside of 12.64%. Given Kinder Morgan’s higher probable upside, analysts clearly believe Kinder Morgan is more favorable than Teekay Tankers.
Profitability
This table compares Teekay Tankers and Kinder Morgan’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Teekay Tankers | 51.35% | 22.11% | 20.23% |
| Kinder Morgan | 19.31% | 10.46% | 4.65% |
Dividends
Teekay Tankers pays an annual dividend of $1.00 per share and has a dividend yield of 1.0%. Kinder Morgan pays an annual dividend of $1.19 per share and has a dividend yield of 3.8%. Teekay Tankers pays out 5.9% of its earnings in the form of a dividend. Kinder Morgan pays out 76.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Teekay Tankers has raised its dividend for 2 consecutive years and Kinder Morgan has raised its dividend for 9 consecutive years. Kinder Morgan is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Insider and Institutional Ownership
52.7% of Teekay Tankers shares are held by institutional investors. Comparatively, 62.5% of Kinder Morgan shares are held by institutional investors. 1.9% of Teekay Tankers shares are held by company insiders. Comparatively, 12.7% of Kinder Morgan shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Summary
Kinder Morgan beats Teekay Tankers on 11 of the 18 factors compared between the two stocks.
About Teekay Tankers
Teekay Tankers Ltd. provides crude oil and other marine transportation services to oil industries in Bermuda and internationally. The company offers voyage and time charter services; offshore ship-to-ship transfer services of commodities primarily crude oil and refined oil products; and tanker commercial and technical management services. It also engages management of vessels, procurement, and equipment rental businesses. Teekay Tankers Ltd. was incorporated in 2007 and is headquartered in Hamilton, Bermuda.
About Kinder Morgan
Kinder Morgan, Inc. operates as an energy infrastructure company primarily in North America. The company operates through Natural Gas Pipelines, Products Pipelines, Terminals, and CO2 segments. The Natural Gas Pipelines segment owns and operates interstate and intrastate natural gas pipeline, and storage systems; natural gas gathering systems and natural gas processing and treating facilities; natural gas liquids fractionation facilities and transportation systems; and liquefied natural gas gasification, liquefaction, and storage facilities. The Products Pipelines segment owns and operates refined petroleum products, and crude oil and condensate pipelines; and associated product terminals and petroleum pipeline transmix facilities. The Terminals segment owns and/or operates liquids and bulk terminals that stores and handles various commodities, including gasoline, diesel fuel, renewable fuel and feedstocks, chemicals, ethanol, metals, and petroleum coke; and owns tankers. The CO2 segment produces, transports, and markets CO2 to recovery and production crude oil from mature oil fields; owns interests in/or operates oil fields and gasoline processing plants; and operates a crude oil pipeline system in West Texas, as well as owns and operates RNG and LNG facilities. It owns and operates approximately 82,000 miles of pipelines and 139 terminals. The company was formerly known as Kinder Morgan Holdco LLC and changed its name to Kinder Morgan, Inc. in February 2011. Kinder Morgan, Inc. was incorporated in 2006 and is headquartered in Houston, Texas.
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