Financial Contrast: Cosan (CZZ) & Midcoast Energy Partners (MEP)

Cosan (NYSE: CZZ) and Midcoast Energy Partners (NYSE:MEP) are both small-cap basic materials companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, valuation, institutional ownership, risk, profitability, dividends and analyst recommendations.

Volatility and Risk

Cosan has a beta of 2.36, meaning that its stock price is 136% more volatile than the S&P 500. Comparatively, Midcoast Energy Partners has a beta of 2.45, meaning that its stock price is 145% more volatile than the S&P 500.

Valuation and Earnings

This table compares Cosan and Midcoast Energy Partners’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cosan $3.59 billion 0.46 $79.64 million N/A N/A
Midcoast Energy Partners N/A N/A N/A ($3.67) -2.17

Cosan has higher revenue and earnings than Midcoast Energy Partners.

Profitability

This table compares Cosan and Midcoast Energy Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cosan 1.65% 0.72% 0.22%
Midcoast Energy Partners -5.25% -34.51% -2.64%

Analyst Ratings

This is a breakdown of current ratings for Cosan and Midcoast Energy Partners, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cosan 0 1 1 0 2.50
Midcoast Energy Partners 0 1 0 0 2.00

Midcoast Energy Partners has a consensus price target of $8.00, suggesting a potential upside of 0.63%. Given Midcoast Energy Partners’ higher probable upside, analysts clearly believe Midcoast Energy Partners is more favorable than Cosan.

Dividends

Cosan pays an annual dividend of $0.08 per share and has a dividend yield of 0.8%. Midcoast Energy Partners pays an annual dividend of $1.43 per share and has a dividend yield of 18.0%. Midcoast Energy Partners pays out -39.0% of its earnings in the form of a dividend. Cosan has increased its dividend for 2 consecutive years.

Insider & Institutional Ownership

41.7% of Cosan shares are owned by institutional investors. Comparatively, 64.7% of Midcoast Energy Partners shares are owned by institutional investors. 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.

Summary

Cosan beats Midcoast Energy Partners on 8 of the 13 factors compared between the two stocks.

Cosan Company Profile

Cosan Limited (Cosan) is a holding company. The Company’s segments include Raizen Energia, Raizen Combustiveis, COMGAS, Cosan Logistica, Lubricants and Other business. The Company’s other business include other investments, in addition to the corporate activities. The Company offers Logistics services, including transportation, port loading and storage of sugar, leasing or lending of locomotives, wagons and other railway equipment, through its subsidiaries Rumo Logistica Operadora Multimodal S.A. (Rumo), logistic segment (Logistic). The Company is also engaged in production and distribution of lubricants, through its indirect subsidiaries Cosan Lubrificantes e Especialidades S.A. (Moove) and Comma Oil & Chemicals Ltd. (Comma), under the Mobil licensed trademark in Brazil, Bolivia, Uruguay and Paraguay, in addition to the European and Asian market using the Comma brand and corporate activities (Lubricants).

Midcoast Energy Partners Company Profile

Midcoast Energy Partners, L.P. (MEP) is a limited partnership company that is engaged in the natural gas and natural gas liquids (NGL) midstream business. It operates through two segments: Gathering, Processing and Transportation, and Logistics and Marketing. It also provides marketing services of natural gas and NGLs to wholesale customers. The Company’s gathering, processing and transportation business includes natural gas and NGL gathering and transportation pipeline systems, natural gas processing and treating facilities, condensate stabilizers and an NGL fractionation facility. Its logistics and marketing business provides marketing services of natural gas, NGLs and condensate received from its gathering, processing and transportation business. The Company holds interest in Midcoast Operating, L.P., a Texas limited partnership that owns a network of natural gas and NGL gathering and transportation systems, natural gas processing and treating facilities.

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