Contrasting SemGroup (SEMG) & EnLink Midstream Partners (ENLK)
SemGroup (NYSE: SEMG) and EnLink Midstream Partners (NYSE:ENLK) are both mid-cap oils/energy companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, earnings, risk, dividends, profitability, institutional ownership and valuation.
This table compares SemGroup and EnLink Midstream Partners’ 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%|
This is a summary of recent ratings and target prices for SemGroup and EnLink Midstream Partners, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|EnLink Midstream Partners||0||6||3||0||2.33|
SemGroup currently has a consensus target price of $28.75, indicating a potential upside of 3.42%. EnLink Midstream Partners has a consensus target price of $18.29, indicating a potential upside of 18.05%. Given EnLink Midstream Partners’ higher possible upside, analysts clearly believe EnLink Midstream Partners is more favorable than SemGroup.
SemGroup pays an annual dividend of $1.80 per share and has a dividend yield of 6.5%. EnLink Midstream Partners pays an annual dividend of $1.56 per share and has a dividend yield of 10.1%. SemGroup pays out -2,250.0% of its earnings in the form of a dividend. EnLink Midstream Partners pays out -678.3% 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. SemGroup has increased its dividend for 3 consecutive years and EnLink Midstream Partners has increased its dividend for 2 consecutive years.
Valuation and Earnings
This table compares SemGroup and EnLink Midstream Partners’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|SemGroup||$1.33 billion||1.64||$2.09 million||($0.08)||-347.50|
|EnLink Midstream Partners||$4.25 billion||1.27||-$565.20 million||($0.23)||-67.35|
SemGroup has higher earnings, but lower revenue than EnLink Midstream Partners. SemGroup is trading at a lower price-to-earnings ratio than EnLink Midstream Partners, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
SemGroup has a beta of 2.04, suggesting that its stock price is 104% more volatile than the S&P 500. Comparatively, EnLink Midstream Partners has a beta of 2.08, suggesting that its stock price is 108% more volatile than the S&P 500.
Insider & Institutional Ownership
98.0% of SemGroup shares are held by institutional investors. Comparatively, 41.7% of EnLink Midstream Partners shares are held by institutional investors. 0.8% of SemGroup shares are held by insiders. Comparatively, 0.2% of EnLink Midstream Partners shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
SemGroup beats EnLink Midstream Partners on 10 of the 15 factors compared between the two stocks.
SemGroup Company Profile
SemGroup Corporation is a provider of gathering, transportation, storage, distribution, marketing and other midstream services to producers, refiners of petroleum products and other market participants located in the Midwest and Rocky Mountain regions of the United States and Canada. The Company’s segments include Crude Transportation, which operates crude oil pipelines and truck transportation businesses in the United States; Crude Facilities, which operates crude oil storage and terminal businesses in the United States; Crude Supply and Logistics, which operates a crude oil marketing business; SemGas, which provides natural gas gathering and processing services; SemCAMS, which operates natural gas processing and gathering facilities in Alberta, Canada; SemLogistics, which owns petroleum products storage facility in the United Kingdom, and SemMexico, which provides liquid asphalt cement products and product application services to the Mexican market, and Corporate and Other.
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.
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