Enterprise Products Partners (NYSE:EPD) versus SandRidge Energy (NYSE:SD) Head-To-Head Review

Enterprise Products Partners (NYSE:EPD) and SandRidge Energy (NYSE:SD) are both energy companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, valuation, analyst recommendations, risk, institutional ownership, profitability and earnings.

Dividends

Enterprise Products Partners pays an annual dividend of $2.24 per share and has a dividend yield of 6.2%. SandRidge Energy pays an annual dividend of $0.52 per share and has a dividend yield of 3.8%. Enterprise Products Partners pays out 77.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. SandRidge Energy pays out 23.2% of its earnings in the form of a dividend. Enterprise Products Partners has raised its dividend for 28 consecutive years and SandRidge Energy has raised its dividend for 2 consecutive years. Enterprise Products Partners is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

26.1% of Enterprise Products Partners shares are owned by institutional investors. Comparatively, 61.8% of SandRidge Energy shares are owned by institutional investors. 32.6% of Enterprise Products Partners shares are owned by company insiders. Comparatively, 1.6% of SandRidge Energy shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Enterprise Products Partners and SandRidge Energy, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Enterprise Products Partners	1	10	7	0	2.33
SandRidge Energy	0	3	0	0	2.00

Enterprise Products Partners presently has a consensus target price of $40.12, suggesting a potential upside of 11.14%. Given Enterprise Products Partners’ stronger consensus rating and higher possible upside, analysts plainly believe Enterprise Products Partners is more favorable than SandRidge Energy.

Profitability

This table compares Enterprise Products Partners and SandRidge Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Enterprise Products Partners	10.79%	20.67%	7.93%
SandRidge Energy	46.06%	13.62%	10.93%

Valuation and Earnings

This table compares Enterprise Products Partners and SandRidge Energy”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Enterprise Products Partners	$52.60 billion	1.48	$5.81 billion	$2.88	12.53
SandRidge Energy	$156.36 million	3.29	$70.20 million	$2.24	6.19

Enterprise Products Partners has higher revenue and earnings than SandRidge Energy. SandRidge Energy is trading at a lower price-to-earnings ratio than Enterprise Products Partners, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Enterprise Products Partners has a beta of 0.5, indicating that its stock price is 50% less volatile than the S&P 500. Comparatively, SandRidge Energy has a beta of 0.71, indicating that its stock price is 29% less volatile than the S&P 500.

Summary

Enterprise Products Partners beats SandRidge Energy on 11 of the 17 factors compared between the two stocks.

About Enterprise Products Partners

Enterprise Products Partners L.P. provides midstream energy services to producers and consumers of natural gas, natural gas liquids (NGLs), crude oil, petrochemicals, and refined products. It operates in four segments: NGL Pipelines & Services, Crude Oil Pipelines & Services, Natural Gas Pipelines & Services, and Petrochemical & Refined Products Services. The NGL Pipelines & Services segment offers natural gas processing and related NGL marketing services. It operates natural gas processing facilities located in Colorado, Louisiana, Mississippi, New Mexico, Texas, and Wyoming; NGL pipelines; NGL fractionation facilities; NGL and related product storage facilities; and NGL marine terminals. The Crude Oil Pipelines & Services segment operates crude oil pipelines; and crude oil storage and marine terminals, which include a fleet of approximately 250 tractor-trailer tank trucks that are used to transport crude oil. It also engages in crude oil marketing activities. The Natural Gas Pipelines & Services segment operates natural gas pipeline systems to gather, treat, and transport natural gas. It leases underground salt dome natural gas storage facilities in Napoleonville, Louisiana; owns an underground salt dome storage cavern in Wharton County, Texas; and markets natural gas. The Petrochemical & Refined Products Services segment operates propylene fractionation facilities, including propylene fractionation units and propane dehydrogenation facilities, and related marketing activities; butane isomerization complex and related deisobutanizer operations; and octane enhancement, isobutane dehydrogenation, and high purity isobutylene production facilities. It also operates refined products pipelines and terminals; and ethylene export terminals; and provides refined products marketing and marine transportation services. Enterprise Products Partners L.P. was founded in 1968 and is headquartered in Houston, Texas.

About SandRidge Energy

SandRidge Energy, Inc. engages in the acquisition, development, and production of oil, natural gas, and natural gas liquids in the United States Mid-Continent. The company was incorporated in 2006 and is headquartered in Oklahoma City, Oklahoma.