Kinder Morgan (NYSE: KMI) and Enable Midstream Partners (NYSE:ENBL) are both mid-cap energy companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, institutional ownership, dividends, risk, earnings, analyst recommendations and profitability.
This table compares Kinder Morgan and Enable Midstream Partners’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Enable Midstream Partners||14.82%||5.24%||3.46%|
60.9% of Kinder Morgan shares are owned by institutional investors. Comparatively, 18.2% of Enable Midstream Partners shares are owned by institutional investors. 14.0% of Kinder Morgan shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Earnings and Valuation
This table compares Kinder Morgan and Enable Midstream Partners’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Kinder Morgan||$13.71 billion||2.93||$183.00 million||$0.01||1,801.00|
|Enable Midstream Partners||$2.27 billion||2.92||$312.00 million||$0.84||18.29|
Enable Midstream Partners has lower revenue, but higher earnings than Kinder Morgan. Enable Midstream Partners is trading at a lower price-to-earnings ratio than Kinder Morgan, indicating that it is currently the more affordable of the two stocks.
This is a summary of recent ratings for Kinder Morgan and Enable Midstream Partners, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Enable Midstream Partners||0||5||3||0||2.38|
Kinder Morgan currently has a consensus target price of $22.73, indicating a potential upside of 26.23%. Enable Midstream Partners has a consensus target price of $18.31, indicating a potential upside of 19.22%. Given Kinder Morgan’s stronger consensus rating and higher probable upside, analysts clearly believe Kinder Morgan is more favorable than Enable Midstream Partners.
Kinder Morgan pays an annual dividend of $0.50 per share and has a dividend yield of 2.8%. Enable Midstream Partners pays an annual dividend of $1.27 per share and has a dividend yield of 8.3%. Kinder Morgan pays out 5,000.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Enable Midstream Partners pays out 151.2% 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 is clearly the better dividend stock, given its higher yield and lower payout ratio.
Risk and Volatility
Kinder Morgan has a beta of 0.62, meaning that its stock price is 38% less volatile than the S&P 500. Comparatively, Enable Midstream Partners has a beta of 1.92, meaning that its stock price is 92% more volatile than the S&P 500.
About Kinder Morgan
Kinder Morgan, Inc. is an energy infrastructure company. It operates through five segments. Its Natural Gas Pipelines segment is engaged in the ownership and operation of interstate and intrastate natural gas pipeline and storage systems, and liquefied natural gas facilities, among others. Its CO2 segment is engaged in the production, transportation and marketing of carbon dioxide (CO2) to oil fields and the ownership and operation of a crude oil pipeline system, among others. Its Terminals segment is engaged in the ownership and/or operation of liquids and bulk terminal facilities located throughout the United States and portions of Canada, and Jones Act tankers. Its Products Pipelines segment is engaged in the ownership and operation of refined petroleum products, natural gas liquids and crude oil and condensate pipelines. Its Kinder Morgan Canada segment is engaged in the ownership and operation of the Trans Mountain pipeline system and Jet Fuel aviation turbine fuel pipeline.
About Enable Midstream Partners
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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