Columbia Pipeline Partners (NYSE: CPPL) and Magellan Midstream Partners L.P. (NYSE:MMP) are both energy companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, institutional ownership, valuation, dividends, earnings and profitability.
This is a summary of recent recommendations for Columbia Pipeline Partners and Magellan Midstream Partners L.P., as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Columbia Pipeline Partners||0||2||0||0||2.00|
|Magellan Midstream Partners L.P.||1||7||5||0||2.31|
Columbia Pipeline Partners currently has a consensus price target of $17.00, suggesting a potential downside of 0.87%. Magellan Midstream Partners L.P. has a consensus price target of $78.83, suggesting a potential upside of 14.73%. Given Magellan Midstream Partners L.P.’s stronger consensus rating and higher probable upside, analysts clearly believe Magellan Midstream Partners L.P. is more favorable than Columbia Pipeline Partners.
Institutional & Insider Ownership
88.2% of Columbia Pipeline Partners shares are held by institutional investors. Comparatively, 61.1% of Magellan Midstream Partners L.P. 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 hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Risk and Volatility
Columbia Pipeline Partners has a beta of 0.86, indicating that its stock price is 14% less volatile than the S&P 500. Comparatively, Magellan Midstream Partners L.P. has a beta of 0.78, indicating that its stock price is 22% less volatile than the S&P 500.
This table compares Columbia Pipeline Partners and Magellan Midstream Partners L.P.’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Columbia Pipeline Partners||6.40%||0.92%||0.84%|
|Magellan Midstream Partners L.P.||34.63%||41.81%||12.78%|
Columbia Pipeline Partners pays an annual dividend of $0.79 per share and has a dividend yield of 4.6%. Magellan Midstream Partners L.P. pays an annual dividend of $3.56 per share and has a dividend yield of 5.2%. Columbia Pipeline Partners pays out 112.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. 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. Columbia Pipeline Partners has raised its dividend for 7 consecutive years. Magellan Midstream Partners L.P. is clearly the better dividend stock, given its higher yield and lower payout ratio.
Valuation & Earnings
This table compares Columbia Pipeline Partners and Magellan Midstream 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|
|Columbia Pipeline Partners||N/A||N/A||N/A||$0.70||24.50|
|Magellan Midstream Partners L.P.||$2.43 billion||6.43||$1.12 billion||$3.68||18.67|
Magellan Midstream Partners L.P. has higher revenue and earnings than Columbia Pipeline Partners. Magellan Midstream Partners L.P. is trading at a lower price-to-earnings ratio than Columbia Pipeline Partners, indicating that it is currently the more affordable of the two stocks.
Magellan Midstream Partners L.P. beats Columbia Pipeline Partners on 11 of the 14 factors compared between the two stocks.
Columbia Pipeline Partners Company Profile
Columbia Pipeline Partners LP (the Partnership) is a limited partnership company operating a portfolio of pipelines, storage and related midstream assets. It is engaged in interstate gas transportation and storage services for local distribution companies (LDCs), marketers and industrial and commercial customers located in northeastern, mid-Atlantic, Midwestern and southern states, and the District of Columbia along with unregulated businesses that include midstream services, including gathering, treating, conditioning, processing, compression and liquids handling, and development of mineral rights positions. The Company owns, operates and develops a portfolio of pipelines, storage and related midstream assets. The Company has a general partner interest in CPG OpCo LP (Columbia OpCo), as well as a limited partner interest in Columbia OpCo, a limited partnership that owns the natural gas transmission and storage assets of Columbia Energy Group (CEG).
Magellan Midstream Partners L.P. Company Profile
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.
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