Comparing Columbia Pipeline Group (CPGX) & Shell Midstream Partners (SHLX)
Columbia Pipeline Group (NYSE: CPGX) and Shell Midstream Partners (NYSE:SHLX) are both energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, dividends, analyst recommendations, valuation and earnings.
Columbia Pipeline Group pays an annual dividend of $0.54 per share and has a dividend yield of 2.1%. Shell Midstream Partners pays an annual dividend of $1.33 per share and has a dividend yield of 5.2%. Columbia Pipeline Group pays out 75.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Shell Midstream Partners pays out 105.6% 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 Group has increased its dividend for 2 consecutive years and Shell Midstream Partners has increased its dividend for 2 consecutive years.
This table compares Columbia Pipeline Group and Shell Midstream Partners’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Columbia Pipeline Group||23.76%||7.15%||3.45%|
|Shell Midstream Partners||85.14%||3,826.80%||27.98%|
Valuation and Earnings
This table compares Columbia Pipeline Group and Shell Midstream Partners’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Columbia Pipeline Group||N/A||N/A||N/A||$0.72||35.40|
|Shell Midstream Partners||$291.30 million||19.68||$244.90 million||$1.26||20.33|
Shell Midstream Partners has higher revenue and earnings than Columbia Pipeline Group. Shell Midstream Partners is trading at a lower price-to-earnings ratio than Columbia Pipeline Group, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of current recommendations and price targets for Columbia Pipeline Group and Shell Midstream Partners, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Columbia Pipeline Group||0||0||0||0||N/A|
|Shell Midstream Partners||0||3||3||0||2.50|
Shell Midstream Partners has a consensus target price of $32.33, indicating a potential upside of 26.25%. Given Shell Midstream Partners’ higher probable upside, analysts plainly believe Shell Midstream Partners is more favorable than Columbia Pipeline Group.
Insider and Institutional Ownership
53.0% of Shell Midstream Partners shares are held 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.
Shell Midstream Partners beats Columbia Pipeline Group on 9 of the 11 factors compared between the two stocks.
Columbia Pipeline Group Company Profile
Columbia Pipeline Group, Inc. owns, operates and develops a portfolio of pipelines, storage and related midstream assets. The Company is engaged in regulated gas transportation and storage services for local distribution companies (LDCs), marketers, producers, 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. Its segment consists of portfolio of pipelines, storage and related midstream assets. It owns approximately 15,000 miles of strategically located interstate gas pipelines extending from New York to the Gulf of Mexico and an underground natural gas storage system with approximately 300 million dekatherms (MMDth) of working gas capacity, as well as related gathering and processing assets.
Shell Midstream Partners 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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