EnLink Midstream (ENLC) and Buckeye Partners (BPL) Critical Analysis
EnLink Midstream (NYSE: ENLC) and Buckeye Partners (NYSE:BPL) are both mid-cap oils/energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, dividends, profitability, valuation, earnings, risk and institutional ownership.
Risk & Volatility
EnLink Midstream has a beta of 2.58, suggesting that its share price is 158% more volatile than the S&P 500. Comparatively, Buckeye Partners has a beta of 1.14, suggesting that its share price is 14% more volatile than the S&P 500.
33.7% of EnLink Midstream shares are held by institutional investors. Comparatively, 70.5% of Buckeye Partners shares are held by institutional investors. 1.2% of EnLink Midstream shares are held by insiders. Comparatively, 0.4% of Buckeye Partners shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Valuation & Earnings
This table compares EnLink Midstream and Buckeye Partners’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|EnLink Midstream||$5.74 billion||0.48||$212.80 million||$1.16||13.12|
|Buckeye Partners||$3.65 billion||1.82||$478.80 million||$3.34||13.50|
Buckeye Partners has lower revenue, but higher earnings 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.
This is a breakdown of current ratings and target prices for EnLink Midstream and Buckeye Partners, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
EnLink Midstream currently has a consensus target price of $17.92, indicating a potential upside of 17.72%. Buckeye Partners has a consensus target price of $60.09, indicating a potential upside of 33.30%. Given Buckeye Partners’ stronger consensus rating and higher possible upside, analysts clearly believe Buckeye Partners is more favorable than EnLink Midstream.
This table compares EnLink Midstream and Buckeye Partners’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
EnLink Midstream pays an annual dividend of $1.04 per share and has a dividend yield of 6.8%. Buckeye Partners pays an annual dividend of $5.05 per share and has a dividend yield of 11.2%. 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 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 has raised its dividend for 15 consecutive years.
Buckeye Partners beats EnLink Midstream on 12 of the 17 factors compared between the two stocks.
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.
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.
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