Southcross Energy Partners (SXE) vs. Enterprise Products Partners (EPD) Critical Analysis

Southcross Energy Partners (NYSE:SXE) and Enterprise Products Partners (NYSE:EPD) are both oils/energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, institutional ownership, valuation, risk and profitability.

Volatility and Risk

Southcross Energy Partners has a beta of 3.99, suggesting that its stock price is 299% more volatile than the S&P 500. Comparatively, Enterprise Products Partners has a beta of 0.88, suggesting that its stock price is 12% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Southcross Energy Partners and Enterprise Products Partners, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Southcross Energy Partners 0 0 0 0 N/A
Enterprise Products Partners 0 1 19 1 3.00

Enterprise Products Partners has a consensus price target of $32.74, indicating a potential upside of 24.95%. Given Enterprise Products Partners’ higher probable upside, analysts clearly believe Enterprise Products Partners is more favorable than Southcross Energy Partners.

Insider & Institutional Ownership

1.6% of Southcross Energy Partners shares are held by institutional investors. Comparatively, 37.3% of Enterprise Products Partners shares are held by institutional investors. 23.8% of Southcross Energy Partners shares are held by insiders. Comparatively, 37.5% of Enterprise Products Partners shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Dividends

Enterprise Products Partners pays an annual dividend of $1.73 per share and has a dividend yield of 6.6%. Southcross Energy Partners does not pay a dividend. Enterprise Products Partners pays out 131.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Southcross Energy Partners has increased its dividend for 4 consecutive years and Enterprise Products Partners has increased its dividend for 19 consecutive years.

Profitability

This table compares Southcross Energy Partners and Enterprise Products Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Southcross Energy Partners -10.77% -14.07% -6.20%
Enterprise Products Partners 10.23% 16.28% 6.71%

Earnings & Valuation

This table compares Southcross Energy Partners and Enterprise Products Partners’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Southcross Energy Partners $665.95 million 0.05 -$67.59 million N/A N/A
Enterprise Products Partners $29.24 billion 1.94 $2.80 billion $1.32 19.85

Enterprise Products Partners has higher revenue and earnings than Southcross Energy Partners.

Summary

Enterprise Products Partners beats Southcross Energy Partners on 13 of the 15 factors compared between the two stocks.

About Southcross Energy Partners

Southcross Energy Partners, L.P., together with its subsidiaries, provides natural gas gathering, processing, treating, compression, and transportation services in the United States. The company also offers natural gas liquid (NGL) fractionation and transportation services. In addition, it supplies natural gas to industrial, commercial, and power generation customers, as well as local distribution companies. The company operates 2 gas processing plants, 1 fractionation plant, and gathering and transportation pipelines in South Texas, Mississippi, and Alabama. Southcross Energy Partners GP, LLC operates as a general partner of Southcross Energy Partners, L.P. The company was founded in 2009 and is headquartered in Dallas, Texas. Southcross Energy Partners, L.P. is a subsidiary of Southcross Holdings LP.

About Enterprise Products Partners

Enterprise Products Partners L.P. provides midstream energy services to producers and consumers of natural gas, natural gas liquids (NGLs), crude oil, petrochemicals, and refined products. The company operates through four segments: NGL Pipelines & Services, Crude Oil Pipelines & Services, Natural Gas Pipelines & Services, and Petrochemical & Refined Products Services. The NGL Pipelines & Services segment offers natural gas processing and related NGL marketing services, as well as NGL export docks and related services. It operates approximately 19,600 miles of NGL pipelines; NGL and related product storage facilities; 14 NGL fractionators; and a liquefied petroleum gas and ethane export terminals, and related operations. The Crude Oil Pipelines & Services segment operates approximately 5,800 miles of crude oil pipelines; and crude oil storage and marine terminals located in Oklahoma and Texas, as well as a fleet of 495 tractor-trailer tank trucks used to transport crude oil. It also engages in crude oil marketing activities. The Natural Gas Pipelines & Services segment operates approximately 19,700 miles of natural gas pipeline systems to gather and transport natural gas in Colorado, Louisiana, New Mexico, Texas, and Wyoming. It leases underground salt dome natural gas storage facilities in Texas and Louisiana; owns an underground salt dome storage cavern in Texas; and markets natural gas. The Petrochemical & Refined Products Services segment operates propylene fractionation and related activities, including 800 miles of pipelines; butane isomerization complex, associated deisobutanizer units, and related pipeline assets; and octane enhancement and high purity isobutylene production facilities. It also operates approximately 4,100 miles of refined products pipelines; and terminals, as well as provides refined products marketing and marine transportation services. The company was founded in 1968 and is headquartered in Houston, Texas.

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