Kinder Morgan (NYSE: KMI) and Enbridge Energy Partners (NYSE:EEP) are both energy companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, valuation, profitability, institutional ownership, risk, analyst recommendations and earnings.
Valuation & Earnings
This table compares Kinder Morgan and Enbridge Energy Partners’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Kinder Morgan||$13.71 billion||2.74||$183.00 million||$0.01||1,683.00|
|Enbridge Energy Partners||$4.48 billion||0.94||-$67.70 million||$0.63||20.46|
This is a breakdown of current ratings for Kinder Morgan and Enbridge Energy Partners, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Enbridge Energy Partners||2||7||1||0||1.90|
Kinder Morgan presently has a consensus target price of $22.73, indicating a potential upside of 35.08%. Enbridge Energy Partners has a consensus target price of $18.14, indicating a potential upside of 40.75%. Given Enbridge Energy Partners’ higher probable upside, analysts clearly believe Enbridge Energy Partners is more favorable than Kinder Morgan.
Risk and Volatility
Kinder Morgan has a beta of 0.56, meaning that its stock price is 44% less volatile than the S&P 500. Comparatively, Enbridge Energy Partners has a beta of 1.16, meaning that its stock price is 16% more volatile than the S&P 500.
This table compares Kinder Morgan and Enbridge Energy Partners’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Enbridge Energy Partners||8.47%||6.03%||1.93%|
Insider & Institutional Ownership
60.6% of Kinder Morgan shares are held by institutional investors. Comparatively, 45.4% of Enbridge Energy Partners shares are held by institutional investors. 14.0% of Kinder Morgan shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Kinder Morgan pays an annual dividend of $0.50 per share and has a dividend yield of 3.0%. Enbridge Energy Partners pays an annual dividend of $1.40 per share and has a dividend yield of 10.9%. 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. Enbridge Energy Partners pays out 222.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Enbridge Energy Partners is clearly the better dividend stock, given its higher yield and lower payout ratio.
Kinder Morgan beats Enbridge Energy Partners on 9 of the 16 factors compared between the two stocks.
Kinder Morgan Company Profile
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.
Enbridge Energy Partners Company Profile
Enbridge Energy Partners, L.P is a geographically and operationally diversified organization that provides crude oil and liquid petroleum gathering and transportation and storage services. The Company operates through the Liquids business segment. Its Liquids segment includes the operations of its Lakehead, North Dakota and mid-continent systems. The Company’s Lakehead system along with the Enbridge system formed the Mainline system, together formed the liquid petroleum pipeline system, as of December 31, 2016. The Mainline system serves refining centers in the Great Lakes and Midwest regions of the United States and the provinces of Ontario and Quebec, Canada. The Lakehead system is the United States portion of the Mainline system.
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