Analyzing Shell Midstream Partners, L.P. (SHLX) & Its Peers

Shell Midstream Partners, L.P. (NYSE: SHLX) is one of 53 publicly-traded companies in the “Oil & Gas Transportation Services” industry, but how does it compare to its peers? We will compare Shell Midstream Partners, L.P. to similar companies based on the strength of its analyst recommendations, dividends, profitability, risk, institutional ownership, earnings and valuation.

Dividends

Shell Midstream Partners, L.P. pays an annual dividend of $1.22 per share and has a dividend yield of 4.5%. Shell Midstream Partners, L.P. pays out 98.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Oil & Gas Transportation Services” companies pay a dividend yield of 6.6% and pay out 172.0% of their earnings in the form of a dividend.

Institutional and Insider Ownership

43.8% of Shell Midstream Partners, L.P. shares are owned by institutional investors. Comparatively, 57.2% of shares of all “Oil & Gas Transportation Services” companies are owned by institutional investors. 9.3% of shares of all “Oil & Gas Transportation Services” companies are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Volatility & Risk

Shell Midstream Partners, L.P. has a beta of 1.17, indicating that its stock price is 17% more volatile than the S&P 500. Comparatively, Shell Midstream Partners, L.P.’s peers have a beta of 1.39, indicating that their average stock price is 39% more volatile than the S&P 500.

Valuation and Earnings

This table compares Shell Midstream Partners, L.P. and its peers gross revenue, earnings per share (EPS) and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Shell Midstream Partners, L.P. $283.50 million $160.60 million 21.81
Shell Midstream Partners, L.P. Competitors $5.66 billion $1.31 billion 37.04

Shell Midstream Partners, L.P.’s peers have higher revenue and earnings than Shell Midstream Partners, L.P.. Shell Midstream Partners, L.P. is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Profitability

This table compares Shell Midstream Partners, L.P. and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Shell Midstream Partners, L.P. 87.22% 258.67% 28.64%
Shell Midstream Partners, L.P. Competitors 17.34% 14.24% 5.50%

Analyst Ratings

This is a summary of recent recommendations for Shell Midstream Partners, L.P. and its peers, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Shell Midstream Partners, L.P. 0 1 4 0 2.80
Shell Midstream Partners, L.P. Competitors 275 1757 2346 85 2.50

Shell Midstream Partners, L.P. currently has a consensus price target of $34.80, indicating a potential upside of 28.65%. As a group, “Oil & Gas Transportation Services” companies have a potential upside of 20.32%. Given Shell Midstream Partners, L.P.’s stronger consensus rating and higher probable upside, equities analysts clearly believe Shell Midstream Partners, L.P. is more favorable than its peers.

Summary

Shell Midstream Partners, L.P. peers beat Shell Midstream Partners, L.P. on 8 of the 15 factors compared.

Shell Midstream Partners, L.P. Company Profile

Shell Midstream Partners, L.P. is a master limited partnership company, which owns, operates, develops and acquires pipelines and other midstream assets. The Company conducts its operations through its subsidiary, Shell Midstream Operating, LLC. Its assets consist of interests in entities that own crude oil and refined products pipelines serving as key infrastructure to transport onshore and offshore crude oil production to Gulf Coast and Midwest refining markets and to deliver refined products from those markets to demand centers. As of December 31, 2016, it owned interests in seven crude oil pipeline systems, three refined products systems, one natural gas gathering pipeline system and a crude tank storage and terminal system. Its pipeline and terminal systems include Zydeco crude oil system, Auger crude oil system, Mars crude oil system, Bengal product system, Poseidon crude oil system, Odyssey crude oil system, Proteus crude oil system and Endymion crude oil system.

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