Boardwalk Pipeline Partners (NYSE:BWP) and Archrock (NYSE:AROC) are both oils/energy companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, earnings, profitability, analyst recommendations, institutional ownership, valuation and dividends.

Institutional & Insider Ownership

92.6% of Boardwalk Pipeline Partners shares are held by institutional investors. Comparatively, 88.9% of Archrock shares are held by institutional investors. 2.5% of Archrock shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Boardwalk Pipeline Partners and Archrock’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Boardwalk Pipeline Partners 21.29% 6.85% 3.65%
Archrock 4.19% 0.45% 0.14%

Analyst Ratings

This is a summary of recent ratings and price targets for Boardwalk Pipeline Partners and Archrock, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Boardwalk Pipeline Partners 1 6 3 0 2.20
Archrock 0 2 5 0 2.71

Boardwalk Pipeline Partners presently has a consensus target price of $15.56, suggesting a potential upside of 29.15%. Archrock has a consensus target price of $14.63, suggesting a potential upside of 20.37%. Given Boardwalk Pipeline Partners’ higher possible upside, analysts clearly believe Boardwalk Pipeline Partners is more favorable than Archrock.

Earnings and Valuation

This table compares Boardwalk Pipeline Partners and Archrock’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Boardwalk Pipeline Partners $1.32 billion 2.28 $297.00 million $1.35 8.93
Archrock $794.66 million 1.98 $18.95 million ($0.20) -60.75

Boardwalk Pipeline Partners has higher revenue and earnings than Archrock. Archrock is trading at a lower price-to-earnings ratio than Boardwalk Pipeline Partners, indicating that it is currently the more affordable of the two stocks.

Dividends

Boardwalk Pipeline Partners pays an annual dividend of $0.40 per share and has a dividend yield of 3.3%. Archrock pays an annual dividend of $0.53 per share and has a dividend yield of 4.4%. Boardwalk Pipeline Partners pays out 29.6% of its earnings in the form of a dividend. Archrock pays out -265.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Archrock is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk and Volatility

Boardwalk Pipeline Partners has a beta of 0.63, meaning that its stock price is 37% less volatile than the S&P 500. Comparatively, Archrock has a beta of 2.84, meaning that its stock price is 184% more volatile than the S&P 500.

Summary

Boardwalk Pipeline Partners beats Archrock on 10 of the 16 factors compared between the two stocks.

About Boardwalk Pipeline Partners

Boardwalk Pipeline Partners, LP, through its subsidiaries, owns and operates integrated natural gas and natural gas liquids and other hydrocarbons (NGLs) pipeline and storage systems in the United States. It operates interstate natural gas and NGLs pipeline systems, and integrated storage facilities, which are located in the Gulf Coast region, Oklahoma, Arkansas and the Midwestern states of Tennessee, Kentucky, Illinois, Indiana and Ohio. The company's pipeline systems contain approximately 13,880 miles of interconnected natural gas pipelines, directly serving customers in 13 states and indirectly serving customers throughout the northeastern and southeastern United States through various interconnections with unaffiliated pipelines. It also owns and operates approximately 455 miles of NGLs pipelines serving customers in Louisiana and Texas. In addition, the company has underground storage caverns having aggregate capacity of approximately 205.0 billion cubic feet of working natural gas and 24.5 million barrels of NGLs. It serves producers of natural gas, local distribution companies, marketers, electric power generators, industrial users, and interstate and intrastate pipelines. The company was founded in 2005 and is headquartered in Houston, Texas. Boardwalk Pipeline Partners, LP is a subsidiary of Boardwalk Pipelines Holding Corp.

About Archrock

Archrock, Inc. engages in the natural gas contract operations services business in the United States. The company provides natural gas compression services to customers in the oil and natural gas industry. It also offers aftermarket services, such as parts and components; and operation, maintenance, overhaul, and reconfiguration services to customers who own compression equipment. The company was formerly known as Exterran Holdings, Inc. and changed its name to Archrock, Inc. in November 2015. Archrock, Inc. was founded in 1990 and is headquartered in Houston, Texas.

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