Contrasting EnLink Midstream Partners (ENLK) & Frontline (FRO)

EnLink Midstream Partners (NYSE: ENLK) and Frontline (NYSE:FRO) are both mid-cap energy companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, earnings, risk, analyst recommendations, dividends, institutional ownership and profitability.

Dividends

EnLink Midstream Partners pays an annual dividend of $1.56 per share and has a dividend yield of 8.8%. Frontline pays an annual dividend of $0.30 per share and has a dividend yield of 5.9%. EnLink Midstream Partners pays out -678.3% of its earnings in the form of a dividend. Frontline pays out 200.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. EnLink Midstream Partners has raised its dividend for 2 consecutive years and Frontline has raised its dividend for 3 consecutive years. EnLink Midstream Partners is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation & Earnings

This table compares EnLink Midstream Partners and Frontline’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
EnLink Midstream Partners $4.25 billion 1.45 -$565.20 million ($0.23) -76.91
Frontline $754.31 million 1.14 $117.01 million $0.15 33.73

Frontline has lower revenue, but higher earnings than EnLink Midstream Partners. EnLink Midstream Partners is trading at a lower price-to-earnings ratio than Frontline, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

41.7% of EnLink Midstream Partners shares are held by institutional investors. Comparatively, 13.2% of Frontline shares are held by institutional investors. 0.2% of EnLink Midstream Partners shares are held by insiders. Comparatively, 48.1% of Frontline shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Risk and Volatility

EnLink Midstream Partners has a beta of 2.08, indicating that its stock price is 108% more volatile than the S&P 500. Comparatively, Frontline has a beta of 1.88, indicating that its stock price is 88% more volatile than the S&P 500.

Profitability

This table compares EnLink Midstream Partners and Frontline’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
EnLink Midstream Partners 0.76% 1.20% 0.53%
Frontline 0.29% 1.70% 0.79%

Analyst Ratings

This is a breakdown of recent ratings for EnLink Midstream Partners and Frontline, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
EnLink Midstream Partners 0 8 3 0 2.27
Frontline 1 1 1 0 2.00

EnLink Midstream Partners currently has a consensus target price of $17.90, indicating a potential upside of 1.19%. Frontline has a consensus target price of $5.67, indicating a potential upside of 11.99%. Given Frontline’s higher probable upside, analysts plainly believe Frontline is more favorable than EnLink Midstream Partners.

Summary

EnLink Midstream Partners beats Frontline on 9 of the 17 factors compared between the two stocks.

EnLink Midstream Partners Company Profile

EnLink Midstream Partners, LP is a midstream company. The Company’s business activities are conducted through its subsidiary, EnLink Midstream Operating, LP (the Operating Partnership) and the subsidiaries of the Operating Partnership. The Company operates through five segments: Texas, Oklahoma, Louisiana, Crude and Condensate, and Corporate. The Company focuses on providing midstream energy services, including gathering, processing, transmission, fractionation, storage, condensate stabilization, brine services and marketing to producers of natural gas, natural gas liquids (NGLs), crude oil and condensate. As of December 31, 2016, its midstream energy asset network included approximately 11,000 miles of pipelines, 20 natural gas processing plants, seven fractionators, barge and rail terminals, product storage facilities, purchasing and marketing capabilities, brine disposal wells, a crude oil trucking fleet, and equity investments in certain private midstream companies.

Frontline Company Profile

Frontline Ltd. is a shipping company. The Company is engaged in the seaborne transportation of crude oil and oil products. Its tankers segment includes crude oil tankers and product tankers. As of December 31, 2016, the Company’s fleet consisted of 28 vessels owned by the Company (seven very large crude carriers (VLCCs), 10 Suezmax tankers and 11 Aframax/LR2 tankers); 13 vessels that are under capital leases (11 VLCCs and two Suezmax tankers); one VLCC that is recorded as an investment in finance lease; four vessels chartered-in for periods of 12 months, including extension options (two VLCCs and two Suezmax tankers); two VLCCs where cost/revenue is split equally with a third party (of which one is chartered-in by it and one by a third party); three medium range product tankers that are chartered-in on short term time charters with a remaining duration of less than two months, and five vessels that are under commercial management (two Suezmax tankers and three Aframax oil tankers).

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