Enbridge (ENB) versus Magellan Midstream Partners L.P. (MMP) Financial Analysis
Enbridge (NYSE: ENB) and Magellan Midstream Partners L.P. (NYSE:MMP) are both large-cap oils/energy companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, risk, earnings, dividends, institutional ownership, valuation and profitability.
This is a summary of recent recommendations for Enbridge and Magellan Midstream Partners L.P., as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Magellan Midstream Partners L.P.||1||8||4||0||2.23|
Enbridge presently has a consensus target price of $56.00, suggesting a potential upside of 38.20%. Magellan Midstream Partners L.P. has a consensus target price of $78.55, suggesting a potential upside of 13.28%. Given Enbridge’s stronger consensus rating and higher possible upside, equities analysts clearly believe Enbridge is more favorable than Magellan Midstream Partners L.P..
Volatility & Risk
Enbridge has a beta of 0.63, meaning that its share price is 37% less volatile than the S&P 500. Comparatively, Magellan Midstream Partners L.P. has a beta of 0.8, meaning that its share price is 20% less volatile than the S&P 500.
Insider and Institutional Ownership
61.6% of Enbridge shares are owned by institutional investors. Comparatively, 60.8% of Magellan Midstream Partners L.P. shares are owned by institutional investors. 0.2% of Magellan Midstream Partners L.P. shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Enbridge pays an annual dividend of $1.96 per share and has a dividend yield of 4.8%. Magellan Midstream Partners L.P. pays an annual dividend of $3.56 per share and has a dividend yield of 5.1%. Enbridge pays out 190.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Magellan Midstream Partners L.P. pays out 96.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Enbridge has raised its dividend for 7 consecutive years and Magellan Midstream Partners L.P. has raised its dividend for 5 consecutive years. Magellan Midstream Partners L.P. is clearly the better dividend stock, given its higher yield and lower payout ratio.
This table compares Enbridge and Magellan Midstream Partners L.P.’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Magellan Midstream Partners L.P.||34.63%||41.81%||12.78%|
Valuation and Earnings
This table compares Enbridge and Magellan Midstream Partners L.P.’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Enbridge||$31.61 billion||2.11||$5.86 billion||$1.03||39.34|
|Magellan Midstream Partners L.P.||$2.43 billion||6.51||$1.12 billion||$3.68||18.84|
Enbridge has higher revenue and earnings than Magellan Midstream Partners L.P.. Magellan Midstream Partners L.P. is trading at a lower price-to-earnings ratio than Enbridge, indicating that it is currently the more affordable of the two stocks.
Magellan Midstream Partners L.P. beats Enbridge on 9 of the 16 factors compared between the two stocks.
Enbridge Company Profile
Enbridge Inc. is a Canada-based energy transportation and distribution company. The Company is engaged in delivering energy. It operates through five segments: Liquids Pipelines, Gas Distribution, Gas Pipelines and Processing, Green Power and Transmission, and Energy Services. Liquids Pipelines consists of common carrier and contract crude oil, natural gas liquids (NGL), and refined products pipelines and terminals, including Canadian Mainline, Lakehead Pipeline System, Mid-Continent and Gulf Coast and Regional Oil Sands System. Gas Distribution consists of its natural gas utility operations, the core of which is Enbridge Gas Distribution Inc. Green Power and Transmission consists of its investments in renewable energy assets and transmission facilities. Renewable energy assets consist of wind, solar, geothermal and waste heat recovery facilities in Canada. Energy Services undertake physical commodity marketing activity and logistical services, and oversee refinery supply services.
Magellan Midstream Partners L.P. Company Profile
Magellan Midstream Partners, L.P. is principally engaged in the transportation, storage and distribution of refined petroleum products and crude oil. The Company operates through three segments: refined products, crude oil and marine storage. As of December 31, 2016, its asset portfolio, including the assets of its joint ventures, consisted of its refined products segment, consisting 9,700-mile refined products pipeline system with 53 terminals, as well as 26 independent terminals not connected to its pipeline system and its 1,100-mile ammonia pipeline system; its crude oil segment, consisted of approximately 2,200 miles of crude oil pipelines and storage facilities with an aggregate storage capacity of approximately 26 million barrels, of which 16 million are used for contract storage, and its marine storage segment, consisted of five marine terminals located along coastal waterways with an aggregate storage capacity of approximately 26 million barrels.
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