Magellan Midstream Partners L.P. (NYSE: MMP) and Summit Midstream Partners, (NYSE:SMLP) are both oils/energy companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, earnings, valuation, risk, analyst recommendations, profitability and institutional ownership.
Insider & Institutional Ownership
60.9% of Magellan Midstream Partners L.P. shares are held by institutional investors. Comparatively, 49.8% of Summit Midstream Partners, shares are held by institutional investors. 0.2% of Magellan Midstream Partners L.P. shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
This table compares Magellan Midstream Partners L.P. and Summit Midstream Partners,’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Magellan Midstream Partners L.P.||34.63%||41.81%||12.78%|
|Summit Midstream Partners,||5.78%||3.55%||1.33%|
Volatility and Risk
Magellan Midstream Partners L.P. has a beta of 0.79, indicating that its share price is 21% less volatile than the S&P 500. Comparatively, Summit Midstream Partners, has a beta of 1.7, indicating that its share price is 70% more volatile than the S&P 500.
Earnings & Valuation
This table compares Magellan Midstream Partners L.P. and Summit Midstream Partners,’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Magellan Midstream Partners L.P.||$2.43 billion||6.60||$1.12 billion||$3.68||19.16|
|Summit Midstream Partners,||$459.61 million||3.39||$279.66 million||$0.24||88.96|
Magellan Midstream Partners L.P. has higher revenue and earnings than Summit Midstream Partners,. Magellan Midstream Partners L.P. is trading at a lower price-to-earnings ratio than Summit Midstream Partners,, indicating that it is currently the more affordable of the two stocks.
This is a summary of current ratings and price targets for Magellan Midstream Partners L.P. and Summit Midstream Partners,, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Magellan Midstream Partners L.P.||1||7||5||0||2.31|
|Summit Midstream Partners,||1||2||3||0||2.33|
Magellan Midstream Partners L.P. currently has a consensus target price of $78.83, indicating a potential upside of 11.79%. Summit Midstream Partners, has a consensus target price of $26.20, indicating a potential upside of 22.72%. Given Summit Midstream Partners,’s stronger consensus rating and higher probable upside, analysts plainly believe Summit Midstream Partners, is more favorable than Magellan Midstream Partners L.P..
Magellan Midstream Partners L.P. pays an annual dividend of $3.56 per share and has a dividend yield of 5.0%. Summit Midstream Partners, pays an annual dividend of $2.30 per share and has a dividend yield of 10.8%. Magellan Midstream Partners L.P. pays out 96.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Summit Midstream Partners, pays out 958.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Magellan Midstream Partners L.P. has increased its dividend for 3 consecutive years and Summit Midstream Partners, has increased its dividend for 7 consecutive years. Summit Midstream Partners, is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Magellan Midstream Partners L.P. beats Summit Midstream Partners, on 11 of the 17 factors compared between the two stocks.
About Magellan Midstream Partners L.P.
Magellan Midstream Partners, L.P. is principally engaged in the transportation, storage and distribution of refined petroleum products and crude oil. The Company operates through three segments: refined products, crude oil and marine storage. As of December 31, 2016, its asset portfolio, including the assets of its joint ventures, consisted of its refined products segment, consisting 9,700-mile refined products pipeline system with 53 terminals, as well as 26 independent terminals not connected to its pipeline system and its 1,100-mile ammonia pipeline system; its crude oil segment, consisted of approximately 2,200 miles of crude oil pipelines and storage facilities with an aggregate storage capacity of approximately 26 million barrels, of which 16 million are used for contract storage, and its marine storage segment, consisted of five marine terminals located along coastal waterways with an aggregate storage capacity of approximately 26 million barrels.
About Summit Midstream Partners,
Summit Midstream Partners, LP focuses on developing, owning and operating midstream energy infrastructure assets. The Company’s segments include the Utica Shale, which includes its ownership interest in Ohio Gathering, as well as Summit Utica; the Williston Basin, which includes Bison Midstream, Polar and Divide and Tioga Midstream; the Marcellus Shale, which includes Mountaineer Midstream; the Barnett Shale, which includes DFW Midstream Services LLC (DFW Midstream), and the Piceance Basin /DJ Basins, which includes Grand River and Niobrara G&P. The Company’s assets are located in the producing areas of unconventional resource basins, primarily shale formations, in the continental United States. It provides natural gas gathering, treating and processing services, as well as crude oil and produced water gathering services pursuant to long-term and fee-based agreements with its customers.
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