Buckeye Partners (NYSE: BPL) and Enable Midstream Partners (NYSE:ENBL) are both mid-cap energy companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, profitability, institutional ownership, earnings, valuation, dividends and analyst recommendations.

Institutional & Insider Ownership

69.9% of Buckeye Partners shares are held by institutional investors. Comparatively, 18.2% of Enable Midstream Partners shares are held by institutional investors. 0.4% of Buckeye Partners shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Risk & Volatility

Buckeye Partners has a beta of 1.1, indicating that its stock price is 10% more volatile than the S&P 500. Comparatively, Enable Midstream Partners has a beta of 1.92, indicating that its stock price is 92% more volatile than the S&P 500.

Valuation and Earnings

This table compares Buckeye Partners and Enable Midstream Partners’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Buckeye Partners $3.25 billion 2.37 $535.60 million $3.26 16.10
Enable Midstream Partners $2.27 billion 2.85 $312.00 million $0.83 18.01

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

Dividends

Buckeye Partners pays an annual dividend of $5.05 per share and has a dividend yield of 9.6%. Enable Midstream Partners pays an annual dividend of $1.27 per share and has a dividend yield of 8.5%. Buckeye Partners pays out 154.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Enable Midstream Partners pays out 153.0% 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 has raised its dividend for 3 consecutive years and Enable Midstream Partners has raised its dividend for 15 consecutive years.

Profitability

This table compares Buckeye Partners and Enable Midstream Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Buckeye Partners 12.69% 9.72% 4.69%
Enable Midstream Partners 16.03% 5.69% 4.05%

Analyst Recommendations

This is a summary of recent ratings and price targets for Buckeye Partners and Enable Midstream Partners, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Buckeye Partners 1 7 2 0 2.10
Enable Midstream Partners 0 6 4 0 2.40

Buckeye Partners currently has a consensus price target of $65.00, suggesting a potential upside of 23.86%. Enable Midstream Partners has a consensus price target of $17.85, suggesting a potential upside of 19.40%. Given Buckeye Partners’ higher probable upside, research analysts clearly believe Buckeye Partners is more favorable than Enable Midstream Partners.

Summary

Buckeye Partners beats Enable Midstream Partners on 9 of the 17 factors compared between the two stocks.

Buckeye Partners 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.

Enable Midstream Partners Company Profile

Enable Midstream Partners LP owns, operates and develops midstream energy infrastructure assets strategically located to serve its customers. The Company operates in two business segments: Gathering and Processing, and Transportation and Storage. Its gathering and processing segment primarily provides natural gas and crude oil gathering and natural gas processing services to its producer customers. Its transportation and storage segment provides interstate and intrastate natural gas pipeline transportation and storage services primarily to its producer, power plant, Local distribution company (LDC) and industrial end user customers. As of December 31, 2016, the Company owned and operated natural gas and crude oil gathering and natural gas processing assets in five states. As of December 31, 2016, the Company owned and operated interstate and intrastate transportation and storage systems across nine states.

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