TransCanada (NYSE: TRP) and Blueknight Energy Partners L.P., L.L.C. (NASDAQ:BKEP) are both energy companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, risk, profitability, earnings, institutional ownership and dividends.

Volatility and Risk

TransCanada has a beta of 0.67, indicating that its stock price is 33% less volatile than the S&P 500. Comparatively, Blueknight Energy Partners L.P., L.L.C. has a beta of 0.81, indicating that its stock price is 19% less volatile than the S&P 500.

Earnings and Valuation

This table compares TransCanada and Blueknight Energy Partners L.P., L.L.C.’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
TransCanada $10.93 billion 4.05 $5.16 billion $0.86 59.13
Blueknight Energy Partners L.P., L.L.C. $183.18 million 1.21 $65.50 million ($0.13) -44.62

TransCanada has higher revenue and earnings than Blueknight Energy Partners L.P., L.L.C.. Blueknight Energy Partners L.P., L.L.C. is trading at a lower price-to-earnings ratio than TransCanada, indicating that it is currently the more affordable of the two stocks.

Dividends

TransCanada pays an annual dividend of $1.85 per share and has a dividend yield of 3.6%. Blueknight Energy Partners L.P., L.L.C. pays an annual dividend of $0.58 per share and has a dividend yield of 10.0%. TransCanada pays out 215.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Blueknight Energy Partners L.P., L.L.C. pays out -446.2% of its earnings in the form of a dividend. Blueknight Energy Partners L.P., L.L.C. is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional and Insider Ownership

56.8% of TransCanada shares are owned by institutional investors. Comparatively, 57.5% of Blueknight Energy Partners L.P., L.L.C. shares are owned by institutional investors. 1.7% of Blueknight Energy Partners L.P., L.L.C. shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares TransCanada and Blueknight Energy Partners L.P., L.L.C.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
TransCanada 30.31% 17.26% 4.47%
Blueknight Energy Partners L.P., L.L.C. 12.71% -12.45% 7.23%

Analyst Recommendations

This is a summary of current ratings and price targets for TransCanada and Blueknight Energy Partners L.P., L.L.C., as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TransCanada 0 0 8 0 3.00
Blueknight Energy Partners L.P., L.L.C. 0 0 1 0 3.00

TransCanada currently has a consensus price target of $68.50, indicating a potential upside of 34.71%. Blueknight Energy Partners L.P., L.L.C. has a consensus price target of $7.20, indicating a potential upside of 24.14%. Given TransCanada’s higher probable upside, research analysts clearly believe TransCanada is more favorable than Blueknight Energy Partners L.P., L.L.C..

Summary

TransCanada beats Blueknight Energy Partners L.P., L.L.C. on 8 of the 14 factors compared between the two stocks.

About TransCanada

TransCanada Corporation is an energy infrastructure company. The Company is engaged in the development and operation of North American energy infrastructure, including natural gas and liquids pipelines, power generation and natural gas storage facilities. Its segments include Canadian Natural Gas Pipelines, U.S. Natural Gas Pipelines, Mexico Natural Gas Pipelines, Liquids Pipelines and Energy. The Company operates in three businesses: Natural Gas Pipelines, Liquids Pipelines and Energy. The Natural Gas Pipelines and Liquids Pipelines segments principally consist of its respective natural gas and liquids pipelines in Canada, the United States and Mexico, as well as its regulated natural gas storage operations in the United States. The Energy segment includes its power operations and the non-regulated natural gas storage business in Canada. TransCanada PipeLines Limited (TCPL) is its principal operating subsidiary.

About Blueknight Energy Partners L.P., L.L.C.

Blueknight Energy Partners, L.P. is a master limited partnership company. The Company manages its operations through four segments: asphalt terminaling services, crude oil terminaling and storage services, crude oil pipeline services, and crude oil trucking and producer field services. Asphalt terminaling services segment operations generally consist of fee based activities associated with providing storage, terminaling and throughput services for asphalt product and residual fuel oil. Crude oil terminaling and storage segment operations generally consist of fee based activities associated with providing storage, terminaling, and throughput services for crude oil. Crude oil pipeline services segment operations generally consist of fee-based activity associated with transporting crude oil products on pipelines. Crude oil trucking and producer field services segment operations generally consist of fee-based activity associated with transporting crude oil products on trucks.

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