Shell Midstream Partners (NYSE: SHLX) and Mplx (NYSE:MPLX) are both oils/energy companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, valuation, profitability, risk, dividends, earnings and institutional ownership.
Risk & Volatility
Shell Midstream Partners has a beta of 1.24, meaning that its share price is 24% more volatile than the S&P 500. Comparatively, Mplx has a beta of 1.28, meaning that its share price is 28% more volatile than the S&P 500.
Earnings and Valuation
This table compares Shell Midstream Partners and Mplx’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Shell Midstream Partners||$470.10 million||10.73||$372.60 million||$1.28||17.60|
|Mplx||$3.87 billion||6.91||$794.00 million||$1.06||31.75|
Mplx has higher revenue and earnings than Shell Midstream Partners. Shell Midstream Partners is trading at a lower price-to-earnings ratio than Mplx, indicating that it is currently the more affordable of the two stocks.
Shell Midstream Partners pays an annual dividend of $1.39 per share and has a dividend yield of 6.2%. Mplx pays an annual dividend of $2.47 per share and has a dividend yield of 7.3%. Shell Midstream Partners pays out 108.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Mplx pays out 233.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Shell Midstream Partners has increased its dividend for 2 consecutive years and Mplx has increased its dividend for 4 consecutive years. Mplx is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Institutional & Insider Ownership
55.6% of Shell Midstream Partners shares are held by institutional investors. Comparatively, 31.2% of Mplx shares are held by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
This table compares Shell Midstream Partners and Mplx’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Shell Midstream Partners||70.78%||-300.60%||23.22%|
This is a summary of current ratings and price targets for Shell Midstream Partners and Mplx, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Shell Midstream Partners||0||3||7||0||2.70|
Shell Midstream Partners presently has a consensus target price of $28.75, indicating a potential upside of 27.55%. Mplx has a consensus target price of $41.33, indicating a potential upside of 22.87%. Given Shell Midstream Partners’ higher possible upside, analysts plainly believe Shell Midstream Partners is more favorable than Mplx.
Mplx beats Shell Midstream Partners on 9 of the 16 factors compared between the two stocks.
About Shell Midstream Partners
Shell Midstream Partners, L.P. owns, operates, develops, and acquires pipelines and other midstream assets in the United States. Its crude oil pipeline systems include a 350 miles of Zydeco pipeline system; a 130-miles of delta pipeline; a 174-mile offshore Gulf of Mexico corridor pipeline; and a 75-mile offshore pipeline. The company also has interests in Mars pipeline system that is approximately 163 miles that delivers production received from the Mississippi Canyon area and Green Canyon and Walker Ridge to salt dome caverns in Clovelly, Louisiana; and a 105-mile Odyssey pipeline system, which transports crude oil in the offshore eastern Gulf of Mexico to markets in Louisiana. In addition, it has interests in a 367-mile Gulf of Mexico offshore pipeline that transports crude oil to Texas and Louisiana; a 70-mile crude oil pipeline that provides transportation for various oil producers in the eastern Gulf of Mexico; and a 89-mile crude oil Endymion pipeline system that offers transportation for various oil producers in the eastern Gulf of Mexico. In addition, it holds interests in Mars pipeline system that is approximately 163 miles that delivers production received from the Mississippi Canyon area and Green Canyon and Walker Ridge to salt dome caverns in Clovelly, Louisiana. The company's refined products pipeline systems consist of 160-mile Bengal pipeline system connecting four refineries in southern Louisiana to long-haul transportation pipelines; approximately 5,500 miles of pipeline connecting refineries along the Gulf Coast to approximately 265 marketing terminals; and Explorer pipeline system, an 1,830-mile common carrier petroleum products pipeline system, which extends from the Gulf Coast to the Midwest. Shell Midstream Partners GP LLC serves as the general partner of Shell Midstream Partners, L.P. The company was founded in 2014 and is based in Houston, Texas. Shell Midstream Partners, L.P. operates as a subsidiary of Shell Pipeline Company LP.
MPLX LP owns, operates, develops, and acquires midstream energy infrastructure assets. It operates in two segments, Logistics and Storage, and Gathering and Processing segments. The company is involved in the gathering, processing, and transportation of natural gas; gathering, transportation, fractionation, storage, and marketing of natural gas liquids (NGLs); and gathering, transportation, and storage of crude oil and refined petroleum products. MPLX LP also engages in inland marine business, which transports light products, heavy oils, crude oil, renewable fuels, chemicals, and feedstocks in the Midwest and U.S. Gulf Coast regions through inland marine vessels. As of December 31, 2017, its assets included 1,613 miles and 2,360 miles of owned or leased and operated crude oil and product pipelines; partial ownership in 2,194 miles and 1,917 miles of crude oil and products pipelines; and a barge dock facility with approximately 78 thousand barrels per day (mbpd) of crude oil throughput capacity; crude oil and product storage facilities with approximately 18,642 thousands of barrels (mbbls) of available storage capacity. The company's assets also comprised 9 butane and propane storage caverns with approximately 2,755 mbbls of NGL storage capacity; 59 light products terminal facilities, 1 leased terminal, and partial ownership in 2 terminals, with a combined total shell capacity of approximately 23.8 million barrels; 18 tow boats and 232 barges; and gathering and processing infrastructure, with approximately 5.9 one billion cubic feet of natural gas per day (bcf/d) of gathering capacity, 8.0 bcf/d of natural gas processing capacity, and approximately 610 mbpd of fractionation capacity. MPLX GP LLC acts as the general partner of MPLX LP. MPLX LP was founded in 2012 and is based in Findlay, Ohio.
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