Head-To-Head Review: Midcoast Energy Partners (MEP) & Cosan (CZZ)
Midcoast Energy Partners (NYSE: MEP) and Cosan (NYSE:CZZ) are both energy companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, risk, valuation, institutional ownership, profitability, dividends and analyst recommendations.
Midcoast Energy Partners pays an annual dividend of $1.43 per share and has a dividend yield of 18.0%. Cosan pays an annual dividend of $0.08 per share and has a dividend yield of 0.9%. Midcoast Energy Partners pays out -39.0% of its earnings in the form of a dividend. Cosan pays out 25.8% 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. Midcoast Energy Partners has raised its dividend for 2 consecutive years. Midcoast Energy Partners is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares Midcoast Energy Partners and Cosan’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Midcoast Energy Partners||-5.25%||-34.51%||-2.64%|
Earnings & Valuation
This table compares Midcoast Energy Partners and Cosan’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Midcoast Energy Partners||N/A||N/A||N/A||($3.67)||-2.17|
|Cosan||$3.59 billion||0.44||$79.64 million||$0.31||29.94|
Cosan has higher revenue and earnings than Midcoast Energy Partners. Midcoast Energy Partners is trading at a lower price-to-earnings ratio than Cosan, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
64.7% of Midcoast Energy Partners shares are held by institutional investors. Comparatively, 41.9% of Cosan shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Risk and Volatility
Midcoast Energy Partners has a beta of 2.45, suggesting that its share price is 145% more volatile than the S&P 500. Comparatively, Cosan has a beta of 2.36, suggesting that its share price is 136% more volatile than the S&P 500.
This is a breakdown of recent recommendations for Midcoast Energy Partners and Cosan, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Midcoast Energy Partners||0||1||0||0||2.00|
Midcoast Energy Partners currently has a consensus target price of $8.00, indicating a potential upside of 0.63%. Given Midcoast Energy Partners’ higher probable upside, analysts plainly believe Midcoast Energy Partners is more favorable than Cosan.
Cosan beats Midcoast Energy Partners on 7 of the 13 factors compared between the two stocks.
About Midcoast Energy Partners
Midcoast Energy Partners, L.P. (MEP) is a limited partnership company that is engaged in the natural gas and natural gas liquids (NGL) midstream business. It operates through two segments: Gathering, Processing and Transportation, and Logistics and Marketing. It also provides marketing services of natural gas and NGLs to wholesale customers. The Company’s gathering, processing and transportation business includes natural gas and NGL gathering and transportation pipeline systems, natural gas processing and treating facilities, condensate stabilizers and an NGL fractionation facility. Its logistics and marketing business provides marketing services of natural gas, NGLs and condensate received from its gathering, processing and transportation business. The Company holds interest in Midcoast Operating, L.P., a Texas limited partnership that owns a network of natural gas and NGL gathering and transportation systems, natural gas processing and treating facilities.
Cosan Limited (Cosan) is a holding company. The Company’s segments include Raizen Energia, Raizen Combustiveis, COMGAS, Cosan Logistica, Lubricants and Other business. The Company’s other business include other investments, in addition to the corporate activities. The Company offers Logistics services, including transportation, port loading and storage of sugar, leasing or lending of locomotives, wagons and other railway equipment, through its subsidiaries Rumo Logistica Operadora Multimodal S.A. (Rumo), logistic segment (Logistic). The Company is also engaged in production and distribution of lubricants, through its indirect subsidiaries Cosan Lubrificantes e Especialidades S.A. (Moove) and Comma Oil & Chemicals Ltd. (Comma), under the Mobil licensed trademark in Brazil, Bolivia, Uruguay and Paraguay, in addition to the European and Asian market using the Comma brand and corporate activities (Lubricants).
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