Contrasting Penntex Midstream Partners (PTXP) & Magellan Midstream Partners (MMP)
Penntex Midstream Partners (NASDAQ: PTXP) and Magellan Midstream Partners (NYSE:MMP) are both energy companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, analyst recommendations, earnings, institutional ownership, dividends, valuation and risk.
Institutional & Insider Ownership
55.0% of Penntex Midstream Partners shares are held by institutional investors. Comparatively, 62.1% of Magellan Midstream Partners shares are held by institutional investors. 0.2% of Magellan Midstream Partners shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Penntex Midstream Partners pays an annual dividend of $1.18 per share and has a dividend yield of 5.9%. Magellan Midstream Partners pays an annual dividend of $3.62 per share and has a dividend yield of 5.0%. Penntex Midstream Partners pays out 453.8% 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 pays out 97.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Penntex Midstream Partners has increased its dividend for 8 consecutive years. Penntex Midstream Partners is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares Penntex Midstream Partners and Magellan Midstream Partners’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Penntex Midstream Partners||34.54%||11.00%||5.81%|
|Magellan Midstream Partners||34.50%||40.99%||12.58%|
This is a summary of recent ratings and price targets for Penntex Midstream Partners and Magellan Midstream Partners, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Penntex Midstream Partners||0||4||0||0||2.00|
|Magellan Midstream Partners||2||5||3||0||2.10|
Penntex Midstream Partners presently has a consensus target price of $20.00, suggesting a potential upside of 0.00%. Magellan Midstream Partners has a consensus target price of $78.11, suggesting a potential upside of 7.25%. Given Magellan Midstream Partners’ stronger consensus rating and higher possible upside, analysts plainly believe Magellan Midstream Partners is more favorable than Penntex Midstream Partners.
Earnings and Valuation
This table compares Penntex Midstream Partners and Magellan Midstream Partners’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Penntex Midstream Partners||N/A||N/A||N/A||$0.26||76.92|
|Magellan Midstream Partners||$2.21 billion||7.53||$802.77 million||$3.70||19.68|
Magellan Midstream Partners has higher revenue and earnings than Penntex Midstream Partners. Magellan Midstream Partners is trading at a lower price-to-earnings ratio than Penntex Midstream Partners, indicating that it is currently the more affordable of the two stocks.
Magellan Midstream Partners beats Penntex Midstream Partners on 10 of the 14 factors compared between the two stocks.
About Penntex Midstream Partners
PennTex Midstream Partners, LP, focuses on owning, operating, acquiring and developing midstream energy infrastructure assets in North America. The Company owns and operates midstream gathering, processing and transportation assets in northern Louisiana. The Company provides natural gas gathering and processing and residue gas and natural gas liquid (NGL) transportation services to producers focused on the Cotton Valley formation in northern Louisiana. The Company’s assets primarily consisted of natural gas gathering pipeline, two 200 million cubic feet per day (MMcf/d) design-capacity cryogenic natural gas processing plants, and residue gas and NGL transportation pipelines, as of December 31, 2016. In addition to providing midstream services to its primary customer with its existing assets, the Company pursues other opportunities for organic development and growth as producers in its region continue to develop their acreage.
About Magellan Midstream Partners
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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