Reviewing Tallgrass Energy GP, (TEGP) and Buckeye Partners L.P. (BPL)
Tallgrass Energy GP, (NYSE: TEGP) and Buckeye Partners L.P. (NYSE:BPL) are both oils/energy companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, risk, analyst recommendations, dividends, institutional ownership, valuation and profitability.
Volatility & Risk
Tallgrass Energy GP, has a beta of 2.17, indicating that its share price is 117% more volatile than the S&P 500. Comparatively, Buckeye Partners L.P. has a beta of 1.11, indicating that its share price is 11% more volatile than the S&P 500.
Institutional and Insider Ownership
99.7% of Tallgrass Energy GP, shares are held by institutional investors. Comparatively, 70.5% of Buckeye Partners L.P. shares are held by institutional investors. 0.4% of Buckeye Partners L.P. shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Tallgrass Energy GP, pays an annual dividend of $1.37 per share and has a dividend yield of 5.8%. Buckeye Partners L.P. pays an annual dividend of $5.05 per share and has a dividend yield of 9.1%. Tallgrass Energy GP, pays out 201.5% 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 L.P. pays out 138.4% 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 L.P. has increased its dividend for 14 consecutive years. Buckeye Partners L.P. is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares Tallgrass Energy GP, and Buckeye Partners L.P.’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Tallgrass Energy GP,||5.91%||2.01%||0.96%|
|Buckeye Partners L.P.||14.42%||11.04%||5.29%|
Valuation & Earnings
This table compares Tallgrass Energy GP, and Buckeye Partners L.P.’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Tallgrass Energy GP,||$614.20 million||2.25||$349.34 million||$0.68||34.94|
|Buckeye Partners L.P.||$3.47 billion||2.27||$979.66 million||$3.65||15.25|
Buckeye Partners L.P. has higher revenue and earnings than Tallgrass Energy GP,. Buckeye Partners L.P. is trading at a lower price-to-earnings ratio than Tallgrass Energy GP,, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of recent recommendations for Tallgrass Energy GP, and Buckeye Partners L.P., as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Tallgrass Energy GP,||1||5||3||0||2.22|
|Buckeye Partners L.P.||0||8||2||0||2.20|
Tallgrass Energy GP, currently has a consensus target price of $30.00, indicating a potential upside of 26.26%. Buckeye Partners L.P. has a consensus target price of $72.00, indicating a potential upside of 29.31%. Given Buckeye Partners L.P.’s higher possible upside, analysts plainly believe Buckeye Partners L.P. is more favorable than Tallgrass Energy GP,.
Buckeye Partners L.P. beats Tallgrass Energy GP, on 12 of the 17 factors compared between the two stocks.
Tallgrass Energy GP, Company Profile
Tallgrass Energy GP, LP is a limited partnership company, which includes the operations of Tallgrass Equity, LLC (Tallgrass Equity), Tallgrass MLP GP, LLC, Tallgrass Energy Partners, LP (TEP), and TEP’s subsidiaries. TEP owns, operates, acquires and develops midstream energy assets in North America. TEP’s segments include Crude Oil Transportation & Logistics, which is engaged in the ownership and operation of a crude oil pipeline system, and crude oil storage and terminaling facilities; Natural Gas Transportation & Logistics, which is engaged in the ownership and operation of interstate natural gas pipelines and integrated natural gas storage facilities; Processing & Logistics, which is engaged in the ownership and operation of natural gas processing, treating and fractionation facilities, and the provision of water business services to the oil and gas exploration and production industry, and Corporate and Other.
Buckeye Partners L.P. 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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