EnLink Midstream (ENLC) & Enterprise Products Partners L.P. (EPD) Critical Analysis

EnLink Midstream (NYSE: ENLC) and Enterprise Products Partners L.P. (NYSE:EPD) are both mid-cap oils/energy companies, but which is the better stock? We will contrast the two companies based on the strength of their profitability, institutional ownership, dividends, risk, earnings, analyst recommendations and valuation.

Analyst Ratings

This is a breakdown of current ratings for EnLink Midstream and Enterprise Products Partners L.P., as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
EnLink Midstream 2 8 0 0 1.80
Enterprise Products Partners L.P. 0 0 16 0 3.00

EnLink Midstream currently has a consensus price target of $18.30, indicating a potential upside of 13.66%. Enterprise Products Partners L.P. has a consensus price target of $31.63, indicating a potential upside of 25.68%. Given Enterprise Products Partners L.P.’s stronger consensus rating and higher probable upside, analysts clearly believe Enterprise Products Partners L.P. is more favorable than EnLink Midstream.

Profitability

This table compares EnLink Midstream and Enterprise Products Partners L.P.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
EnLink Midstream 0.02% 0.05% 0.02%
Enterprise Products Partners L.P. 10.28% 12.04% 5.25%

Institutional and Insider Ownership

33.8% of EnLink Midstream shares are owned by institutional investors. Comparatively, 38.8% of Enterprise Products Partners L.P. shares are owned by institutional investors. 1.2% of EnLink Midstream shares are owned by company insiders. Comparatively, 37.5% of Enterprise Products Partners L.P. shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Dividends

EnLink Midstream pays an annual dividend of $1.02 per share and has a dividend yield of 6.3%. Enterprise Products Partners L.P. pays an annual dividend of $1.68 per share and has a dividend yield of 6.7%. Enterprise Products Partners L.P. pays out 132.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. EnLink Midstream has increased its dividend for 2 consecutive years and Enterprise Products Partners L.P. has increased its dividend for 18 consecutive years. Enterprise Products Partners L.P. is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares EnLink Midstream and Enterprise Products Partners L.P.’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
EnLink Midstream $4.92 billion 0.59 $751.90 million N/A N/A
Enterprise Products Partners L.P. $26.33 billion 2.05 $5.06 billion $1.27 19.82

Enterprise Products Partners L.P. has higher revenue and earnings than EnLink Midstream.

Volatility and Risk

EnLink Midstream has a beta of 2.58, suggesting that its share price is 158% more volatile than the S&P 500. Comparatively, Enterprise Products Partners L.P. has a beta of 0.89, suggesting that its share price is 11% less volatile than the S&P 500.

Summary

Enterprise Products Partners L.P. beats EnLink Midstream on 13 of the 15 factors compared between the two stocks.

EnLink Midstream Company Profile

EnLink Midstream, LLC is an integrated midstream company. The Company’s assets consist of equity interests in EnLink Midstream Partners, LP (the Partnership) and EnLink Oklahoma Gas Processing, LP (EnLink Oklahoma T.O.). The Partnership is engaged in the gathering, transmission, processing and marketing of natural gas and natural gas liquids (NGLs), condensate and crude oil, as well as providing crude oil, condensate and brine services to producers. EnLink Oklahoma T.O., a partnership owned by the Partnership and the Company, is engaged in the gathering and processing of natural gas. The Partnership’s segments include Texas, Oklahoma, Louisiana, Crude and Condensate, and Corporate. The Partnership connects the wells of producers in its market areas to its gathering systems, processes natural gas to remove NGLs, fractionates NGLs into purity products and markets those products for a fee, transports natural gas and provides natural gas to a range of markets.

Enterprise Products Partners L.P. Company Profile

Enterprise Products Partners L.P. (Enterprise) is a provider of midstream energy services to producers and consumers of natural gas, natural gas liquids (NGLs), crude oil, petrochemicals and refined products in North America. The Company’s segments include NGL Pipelines & Services; Crude Oil Pipelines & Services; Natural Gas Pipelines & Services, and Petrochemical & Refined Products Services. The Company’s midstream energy operations include natural gas gathering, treating, processing, transportation and storage; NGL transportation, fractionation, storage, and import and export terminals, including liquefied petroleum gas (LPG); crude oil gathering, transportation, storage and terminals; petrochemical and refined products transportation, storage, export and import terminals, and related services, and a marine transportation business that operates primarily on the United States inland and Intracoastal Waterway systems.

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