Reviewing Energy Transfer Equity, L.P. (ETE) and DCP Midstream Partners, (DCP)

Energy Transfer Equity, L.P. (NYSE: ETE) and DCP Midstream Partners, (NYSE:DCP) are both mid-cap oils/energy companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, valuation, profitability, analyst recommendations, dividends, earnings and institutional ownership.

Dividends

Energy Transfer Equity, L.P. pays an annual dividend of $1.14 per share and has a dividend yield of 6.8%. DCP Midstream Partners, pays an annual dividend of $3.12 per share and has a dividend yield of 10.2%. Energy Transfer Equity, L.P. pays out 144.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. DCP Midstream Partners, pays out 164.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Energy Transfer Equity, L.P. has raised its dividend for 4 consecutive years.

Risk & Volatility

Energy Transfer Equity, L.P. has a beta of 1.9, meaning that its share price is 90% more volatile than the S&P 500. Comparatively, DCP Midstream Partners, has a beta of 2.1, meaning that its share price is 110% more volatile than the S&P 500.

Profitability

This table compares Energy Transfer Equity, L.P. and DCP Midstream Partners,’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Energy Transfer Equity, L.P. 2.18% 3.79% 1.14%
DCP Midstream Partners, 7.93% 6.71% 3.54%

Earnings and Valuation

This table compares Energy Transfer Equity, L.P. and DCP Midstream Partners,’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Energy Transfer Equity, L.P. $42.15 billion 0.43 $5.53 billion $0.79 21.20
DCP Midstream Partners, $2.44 billion 1.80 $401.00 million $1.90 16.14

Energy Transfer Equity, L.P. has higher revenue and earnings than DCP Midstream Partners,. DCP Midstream Partners, is trading at a lower price-to-earnings ratio than Energy Transfer Equity, L.P., indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current ratings and price targets for Energy Transfer Equity, L.P. and DCP Midstream Partners,, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Energy Transfer Equity, L.P. 0 4 10 0 2.71
DCP Midstream Partners, 1 5 4 0 2.30

Energy Transfer Equity, L.P. presently has a consensus price target of $20.62, indicating a potential upside of 23.08%. DCP Midstream Partners, has a consensus price target of $39.22, indicating a potential upside of 27.93%. Given DCP Midstream Partners,’s higher probable upside, analysts clearly believe DCP Midstream Partners, is more favorable than Energy Transfer Equity, L.P..

Institutional & Insider Ownership

50.3% of Energy Transfer Equity, L.P. shares are owned by institutional investors. Comparatively, 55.7% of DCP Midstream Partners, shares are owned by institutional investors. 3.3% of Energy Transfer Equity, L.P. shares are owned by insiders. Comparatively, 0.0% of DCP Midstream Partners, shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

DCP Midstream Partners, beats Energy Transfer Equity, L.P. on 9 of the 17 factors compared between the two stocks.

About Energy Transfer Equity, L.P.

Energy Transfer Equity, L.P. (ETE) owns equity interests in Energy Transfer Partners, L.P. (ETP) and Sunoco LP, which are engaged in diversified energy-related services. The Company’s segments include Investment in ETP, including the consolidated operations of ETP; Investment in Sunoco LP, including the consolidated operations of Sunoco LP; Investment in Lake Charles LNG, including the operations of Lake Charles LNG, and Corporate and Other. Its Investment in ETP segment includes the ETP’s operations, which include intrastate transportation and storage operations; interstate transportation and storage operations; midstream operations; liquids transportation and services operations; ETP’s Investment in Sunoco Logistics; Retail Marketing operations, and ETP’s other operations and Investments. The Investment in Sunoco LP segment includes wholesale operations and retail operations. Lake Charles LNG owns a LNG import terminal and regasification facility located on Louisiana’s Gulf Coast.

About DCP Midstream Partners,

DCP Midstream, LP, formerly DCP Midstream Partners, LP, is a producer and marketer of natural gas liquids (NGLs) in the United States. The Company is engaged in the business of gathering, compressing, treating, processing, transporting, storing and selling natural gas; producing, fractionating, transporting, storing and selling NGLs and recovering, and selling condensate, and transporting, storing and selling propane in wholesale markets. Its segments include Natural Gas Services, NGL Logistics and Wholesale Propane Logistics. The Natural Gas Services segment consists of various assets and ownership interests that provide a range of wellhead to market services for its producer customers. It owns and operates assets for its NGL Logistics business in the states of Colorado, Kansas, Louisiana, Michigan, Oklahoma and Texas. It owns or operates assets for its wholesale propane logistics business in the states of Maine, Massachusetts, New York, Pennsylvania, Vermont and Virginia.

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