Andeavor Logistics (NASDAQ: ANDX) and ONEOK (NYSE:OKE) are both mid-cap oil & gas transportation services – nec companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, profitability, analyst recommendations, dividends, institutional ownership, valuation and risk.

Analyst Recommendations

This is a breakdown of recent recommendations for Andeavor Logistics and ONEOK, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Andeavor Logistics 0 2 5 0 2.71
ONEOK 0 8 5 0 2.38

Andeavor Logistics presently has a consensus price target of $58.57, suggesting a potential upside of 32.72%. ONEOK has a consensus price target of $58.42, suggesting a potential upside of 11.89%. Given Andeavor Logistics’ stronger consensus rating and higher possible upside, equities analysts clearly believe Andeavor Logistics is more favorable than ONEOK.

Institutional & Insider Ownership

53.2% of ONEOK 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, hedge funds and endowments believe a company will outperform the market over the long term.

Dividends

ONEOK pays an annual dividend of $2.98 per share and has a dividend yield of 5.7%. Andeavor Logistics does not pay a dividend. 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. ONEOK has increased its dividend for 14 consecutive years.

Risk and Volatility

Andeavor Logistics has a beta of 1.12, indicating that its share price is 12% more volatile than the S&P 500. Comparatively, ONEOK has a beta of 1.29, indicating that its share price is 29% more volatile than the S&P 500.

Profitability

This table compares Andeavor Logistics and ONEOK’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Andeavor Logistics 26.63% 15.11% 7.53%
ONEOK 3.76% 9.25% 2.53%

Earnings & Valuation

This table compares Andeavor Logistics and ONEOK’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Andeavor Logistics N/A N/A N/A $2.38 18.54
ONEOK $8.92 billion 2.24 $352.03 million $1.60 32.63

ONEOK has higher revenue and earnings than Andeavor Logistics. Andeavor Logistics is trading at a lower price-to-earnings ratio than ONEOK, indicating that it is currently the more affordable of the two stocks.

Summary

Andeavor Logistics beats ONEOK on 7 of the 13 factors compared between the two stocks.

About Andeavor Logistics

Andeavor Logistics LP, formerly Tesoro Logistics LP, is a full-service logistics company operating in the western and mid-continent regions of the United States. The Company operates through three segments. Its Gathering segment consists of crude oil, natural gas and produced water gathering systems in the Bakken Region and Rockies Region. Its Processing segment consists of the Vermillion processing complex, the Uinta Basin processing complex, the Blacks Fork processing complex and the Emigrant Trail processing complex. Its Terminalling and Transportation segment consists of the Northwest Products Pipeline, which includes a regulated common carrier products, a regulated common carrier refined products pipeline system connecting Tesoro Corporation’s Kenai refinery to Anchorage, Alaska, and crude oil and refined products terminals and storage facilities in the western and midwestern United States; marine terminals in California; a petroleum coke handling and storage facility.

About ONEOK

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.

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