Critical Analysis: Martin Midstream Partners (NASDAQ:MMLP) & Anadarko Petroleum (NASDAQ:APC)

Martin Midstream Partners (NASDAQ:MMLP) and Anadarko Petroleum (NASDAQ:APC) are both small-cap energy companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, risk, profitability, institutional ownership, earnings and dividends.

Earnings & Valuation

This table compares Martin Midstream Partners and Anadarko Petroleum”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Martin Midstream Partners	$744.17 million	0.13	-$14.74 million	($0.38)	-6.64
Anadarko Petroleum	$5.58 billion	0.04	$32.73 million	$0.43	43.21

Anadarko Petroleum has higher revenue and earnings than Martin Midstream Partners. Martin Midstream Partners is trading at a lower price-to-earnings ratio than Anadarko Petroleum, indicating that it is currently the more affordable of the two stocks.

Dividends

Martin Midstream Partners pays an annual dividend of $0.02 per share and has a dividend yield of 0.8%. Anadarko Petroleum pays an annual dividend of $1.04 per share and has a dividend yield of 5.6%. Martin Midstream Partners pays out -5.3% of its earnings in the form of a dividend. Anadarko Petroleum pays out 241.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares Martin Midstream Partners and Anadarko Petroleum’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Martin Midstream Partners	-2.07%	N/A	-2.91%
Anadarko Petroleum	N/A	N/A	N/A

Institutional & Insider Ownership

34.9% of Martin Midstream Partners shares are held by institutional investors. 17.0% of Martin Midstream Partners shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent recommendations for Martin Midstream Partners and Anadarko Petroleum, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Martin Midstream Partners	1	1	0	0	1.50
Anadarko Petroleum	1	2	3	1	2.57

Martin Midstream Partners currently has a consensus price target of $3.00, indicating a potential upside of 18.86%. Anadarko Petroleum has a consensus price target of $22.00, indicating a potential upside of 18.41%. Given Martin Midstream Partners’ higher probable upside, equities analysts clearly believe Martin Midstream Partners is more favorable than Anadarko Petroleum.

Summary

Anadarko Petroleum beats Martin Midstream Partners on 10 of the 15 factors compared between the two stocks.

About Martin Midstream Partners

Martin Midstream Partners L.P., together with its subsidiaries, provides terminalling, processing, storage, and packaging services for petroleum products and by-products primarily in the United States. The company operates in four segments: Terminalling and Storage, Transportation, Sulfur Services, and Specialty Products. The company's Terminalling and Storage segment owns or operates various marine shore-based terminal facilities and specialty terminal facilities that provide storage, refining, blending, packaging, and handling services for producers and suppliers of petroleum products and by-products. This segment also offers land rental services to oil and gas companies, as well as storage and handling services for lubricants and fuels. Its Transportation segment operates various trucks and tank trailers; and inland marine tank barges, inland push boats, and articulated offshore tug and barge unit to transport petroleum products and by-products, petrochemicals, and chemicals. The company's Sulfur Services segment processes molten sulfur into prilled or pelletized sulfur, which is used in the production of fertilizers and industrial chemicals. Its Specialty Products segment stores, distributes, and transports natural gas liquids for wholesale deliveries to refineries, industrial natural gas liquid users, and propane retailers. Martin Midstream GP LLC serves as a general partner of the company. Martin Midstream Partners L.P. was incorporated in 2002 and is based in Kilgore, Texas.

About Anadarko Petroleum

Anadarko Petroleum Corporation engages in the exploration, development, production, and marketing of oil and gas properties. It operates through three segments: Exploration and Production, WES Midstream, and Other Midstream. The company explores for and produces oil, natural gas, and natural gas liquids (NGLs). It is also involved in gathering, processing, treating, and transporting oil, natural-gas, and NGLs production, as well as the gathering and disposal of produced water. The company's oil and natural gas properties are located in the United States onshore and deepwater Gulf of Mexico; and Algeria, Ghana, Mozambique, Colombia, Peru, and other countries. As of December 31, 2018, it had approximately 1.5 billion barrels of oil equivalent of proved reserves. The company was founded in 1959 and is headquartered in The Woodlands, Texas.