Critical Review: Martin Midstream Partners (NASDAQ:MMLP) vs. Canadian Natural Resources (NYSE:CNQ)

Canadian Natural Resources (NYSE:CNQ) and Martin Midstream Partners (NASDAQ:MMLP) are both energy companies, but which is the better business? We will contrast the two companies based on the strength of their valuation, profitability, risk, analyst recommendations, dividends, earnings and institutional ownership.

Volatility and Risk

Canadian Natural Resources has a beta of 0.53, meaning that its stock price is 47% less volatile than the S&P 500. Comparatively, Martin Midstream Partners has a beta of 0.51, meaning that its stock price is 49% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Canadian Natural Resources and Martin Midstream Partners, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Canadian Natural Resources	0	5	7	0	2.58
Martin Midstream Partners	1	1	0	0	1.50

Canadian Natural Resources presently has a consensus target price of $57.00, indicating a potential upside of 17.64%. Martin Midstream Partners has a consensus target price of $3.00, indicating a potential upside of 37.61%. Given Martin Midstream Partners’ higher possible upside, analysts clearly believe Martin Midstream Partners is more favorable than Canadian Natural Resources.

Dividends

Canadian Natural Resources pays an annual dividend of $1.80 per share and has a dividend yield of 3.7%. Martin Midstream Partners pays an annual dividend of $0.02 per share and has a dividend yield of 0.9%. Canadian Natural Resources pays out 44.4% of its earnings in the form of a dividend. Martin Midstream Partners pays out -5.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Canadian Natural Resources has raised its dividend for 24 consecutive years. Canadian Natural Resources is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

74.0% of Canadian Natural Resources shares are held by institutional investors. Comparatively, 34.9% of Martin Midstream Partners shares are held by institutional investors. 5.0% of Canadian Natural Resources shares are held by company insiders. Comparatively, 17.0% of Martin Midstream Partners shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Canadian Natural Resources and Martin Midstream Partners”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Canadian Natural Resources	$31.61 billion	3.15	$7.74 billion	$4.05	11.96
Martin Midstream Partners	$716.11 million	0.12	-$14.74 million	($0.38)	-5.74

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

Profitability

This table compares Canadian Natural Resources and Martin Midstream Partners’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Canadian Natural Resources	22.78%	23.91%	11.45%
Martin Midstream Partners	-2.07%	N/A	-2.91%

Summary

Canadian Natural Resources beats Martin Midstream Partners on 14 of the 17 factors compared between the two stocks.

About Canadian Natural Resources

Canadian Natural Resources Limited acquires, explores for, develops, produces, markets, and sells crude oil, natural gas, and natural gas liquids (NGLs). The company offers light and medium crude oil, primary heavy crude oil, Pelican Lake heavy crude oil, bitumen (thermal oil), and synthetic crude oil (SCO). The company’s midstream assets include two pipeline systems; and a 50% working interest in an 84-megawatt cogeneration plant at Primrose. It operates primarily in Western Canada; the United Kingdom portion of the North Sea; and Offshore Africa. The company was formerly known as AEX Minerals Corporation and changed its name to Canadian Natural Resources Limited in December 1975. Canadian Natural Resources Limited was incorporated in 1973 and is headquartered in Calgary, Canada.

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.