Head-To-Head Analysis: ONEOK (OKE) versus Shell Midstream Partners (SHLX)
ONEOK (NYSE: OKE) and Shell Midstream Partners (NYSE:SHLX) are both mid-cap energy companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, risk, analyst recommendations, dividends, valuation, profitability and institutional ownership.
ONEOK pays an annual dividend of $2.98 per share and has a dividend yield of 5.3%. Shell Midstream Partners pays an annual dividend of $1.27 per share and has a dividend yield of 4.2%. ONEOK pays out 186.3% 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 100.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. ONEOK has increased its dividend for 15 consecutive years and Shell Midstream Partners has increased its dividend for 2 consecutive years. ONEOK is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares ONEOK and Shell Midstream Partners’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Shell Midstream Partners||85.14%||3,826.80%||27.98%|
Risk & Volatility
ONEOK has a beta of 1.26, indicating that its share price is 26% more volatile than the S&P 500. Comparatively, Shell Midstream Partners has a beta of 1.16, indicating that its share price is 16% more volatile than the S&P 500.
This is a summary of recent ratings and target prices for ONEOK and Shell Midstream Partners, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Shell Midstream Partners||0||2||5||0||2.71|
ONEOK currently has a consensus target price of $58.50, indicating a potential upside of 3.56%. Shell Midstream Partners has a consensus target price of $33.71, indicating a potential upside of 11.56%. Given Shell Midstream Partners’ stronger consensus rating and higher possible upside, analysts plainly believe Shell Midstream Partners is more favorable than ONEOK.
Earnings & Valuation
This table compares ONEOK and Shell Midstream Partners’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|ONEOK||$8.92 billion||2.46||$352.03 million||$1.60||35.31|
|Shell Midstream Partners||$291.30 million||19.48||$244.90 million||$1.26||23.98|
ONEOK has higher revenue and earnings than Shell Midstream Partners. Shell Midstream Partners is trading at a lower price-to-earnings ratio than ONEOK, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
70.9% of ONEOK shares are held by institutional investors. Comparatively, 53.0% of Shell Midstream Partners shares are held by institutional investors. 1.0% of ONEOK shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
ONEOK beats Shell Midstream Partners on 9 of the 16 factors compared between the two stocks.
ONEOK, Inc. is an energy midstream service provider in the United States. The Company owns and operates natural gas liquids (NGL) systems, and is engaged in the gathering, processing, storage and transportation of natural gas. THe Company’s operations include a 38,000-mile integrated network of NGL and natural gas pipelines, processing plants, fractionators and storage facilities in the Mid-Continent, Williston, Permian and Rocky Mountain regions. The Company operates through three business segments. The Natural Gas Gathering and Processing segment provides midstream services to contracted producers in North Dakota, Montana, Wyoming, Kansas and Oklahoma. The Natural Gas Liquids segment owns and operates facilities that gather, fractionate, treat and distribute NGLs and store NGL products primarily in the Mid-Continental, Permian Basin and the Rocky Mountain regions. The Natural Gas Pipelines segment provides transportation and storage services to end users.
About Shell Midstream Partners
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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