Suncor Energy (NYSE:SU) vs. Markwest Energy Partners (MWE) Critical Contrast

Suncor Energy (NYSE: SU) and Markwest Energy Partners (NYSE:MWE) are both mid-cap oils/energy companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, valuation, dividends, profitability, analyst recommendations, institutional ownership and risk.

Insider and Institutional Ownership

65.6% of Suncor Energy shares are owned by institutional investors. 1.0% of Suncor Energy shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Suncor Energy and Markwest Energy Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Suncor Energy 8.85% 4.52% 2.29%
Markwest Energy Partners 10.37% 2.42% 1.71%

Valuation and Earnings

This table compares Suncor Energy and Markwest Energy Partners’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Suncor Energy $24.16 billion 2.16 $7.35 billion $1.22 25.75
Markwest Energy Partners N/A N/A N/A N/A N/A

Suncor Energy has higher revenue and earnings than Markwest Energy Partners.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Suncor Energy and Markwest Energy Partners, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Suncor Energy 0 3 14 1 2.89
Markwest Energy Partners 0 0 0 0 N/A

Suncor Energy currently has a consensus target price of $42.86, indicating a potential upside of 36.40%. Given Suncor Energy ‘s higher possible upside, analysts clearly believe Suncor Energy is more favorable than Markwest Energy Partners.

Dividends

Suncor Energy pays an annual dividend of $0.95 per share and has a dividend yield of 3.0%. Markwest Energy Partners does not pay a dividend. Suncor Energy pays out 77.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Markwest Energy Partners has raised its dividend for 6 consecutive years.

Summary

Suncor Energy beats Markwest Energy Partners on 9 of the 12 factors compared between the two stocks.

Suncor Energy Company Profile

Suncor Energy Inc. (Suncor) is an integrated energy company. The Company is focused on developing Canada’s petroleum resource basin, Athabasca oil sands. The Company operates in three business segments: Oil Sands, Exploration and Production (E&P), and Refining and Marketing. The Company’s Oil Sands segment includes Oil Sands operations and Oil Sands ventures operations. Its E&P segment consists of offshore operations off the east coast of Canada and in the North Sea, and onshore assets in North America, Libya and Syria. The Company’s Refining and Marketing segment is engaged in Refining and Supply, and Marketing operations. In addition, it explores for, acquires, develops, produces and markets crude oil and natural gas in Canada and internationally. It transports and refines crude oil, and markets petroleum and petrochemical products primarily in Canada. It markets third-party petroleum products. Suncor also conducts energy trading activities.

Markwest Energy Partners Company Profile

MarkWest Energy Partners, L.P. (MarkWest) is a master limited partnership engaged in the gathering, processing and transportation of natural gas; the gathering, transportation, fractionation, storage and marketing of natural gas liquids (NGLs), and the gathering and transportation of crude oil. The Company operates in four segments: Marcellus, Utica, Northeast and Southwest. The Marcellus segment provides integrated natural gas midstream services in southwestern Pennsylvania and northern West Virginia. The Company’s MarkWest Utica EMG provides gathering, processing, fractionation and marketing services. The Northeast segment assets include the Kenova, Boldman, Cobb, Kermit and Langley natural gas processing complexes, an NGL pipeline and the Siloam fractionation facility. The Company owns a system that consists of natural gas gathering pipelines, centralized compressor stations, two natural gas processing complexes and two NGL pipelines.

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