Western Gas Partners, (WES) vs. Buckeye Partners L.P. (BPL) Financial Analysis
Buckeye Partners L.P. (NYSE: BPL) and Western Gas Partners, (NYSE:WES) 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 dividends, profitabiliy, valuation, risk, institutional ownership, earnings and analyst recommendations.
This table compares Buckeye Partners L.P. and Western Gas Partners,’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Buckeye Partners L.P.||15.36%||12.03%||5.80%|
|Western Gas Partners,||29.79%||16.13%||7.60%|
This is a breakdown of recent ratings for Buckeye Partners L.P. and Western Gas Partners,, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Buckeye Partners L.P.||0||8||2||0||2.20|
|Western Gas Partners,||1||2||7||0||2.60|
Buckeye Partners L.P. currently has a consensus target price of $73.22, indicating a potential upside of 21.27%. Western Gas Partners, has a consensus target price of $61.22, indicating a potential upside of 16.00%. Given Buckeye Partners L.P.’s higher probable upside, equities analysts plainly believe Buckeye Partners L.P. is more favorable than Western Gas Partners,.
Buckeye Partners L.P. pays an annual dividend of $5.00 per share and has a dividend yield of 8.3%. Western Gas Partners, pays an annual dividend of $3.50 per share and has a dividend yield of 6.6%. Buckeye Partners L.P. pays out 127.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Western Gas Partners, pays out 241.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Buckeye Partners L.P. has raised its dividend for 9 consecutive years and Western Gas Partners, has raised its dividend for 14 consecutive years. Buckeye Partners L.P. is clearly the better dividend stock, given its higher yield and lower payout ratio.
Valuation & Earnings
This table compares Buckeye Partners L.P. and Western Gas Partners,’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Buckeye Partners L.P.||$3.44 billion||2.47||$994.06 million||$3.92||15.40|
|Western Gas Partners,||$1.94 billion||3.85||$935.62 million||$1.45||36.40|
Buckeye Partners L.P. has higher revenue and earnings than Western Gas Partners,. Buckeye Partners L.P. is trading at a lower price-to-earnings ratio than Western Gas Partners,, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
70.5% of Buckeye Partners L.P. shares are held by institutional investors. Comparatively, 57.9% of Western Gas Partners, shares are held by institutional investors. 0.4% of Buckeye Partners L.P. shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Risk and Volatility
Buckeye Partners L.P. has a beta of 1.15, indicating that its stock price is 15% more volatile than the S&P 500. Comparatively, Western Gas Partners, has a beta of 1.17, indicating that its stock price is 17% more volatile than the S&P 500.
Western Gas Partners, beats Buckeye Partners L.P. on 9 of the 17 factors compared between the two stocks.
Buckeye Partners L.P. Company Profile
Buckeye Partners, L.P. (Buckeye) owns and operates a network of integrated assets providing midstream logistic solutions, primarily consisting of the transportation, storage, processing and marketing of liquid petroleum products. Its segments include Domestic Pipelines & Terminals, Global Marine Terminals and Merchant Services. As of December 31, 2016, the Domestic Pipelines & Terminals segment owned and operated approximately 6,000 miles of pipeline located primarily in the northeastern and upper Midwestern portions of the United States, and serviced approximately 110 delivery locations. The Global Marine Terminals segment provides marine accessible bulk storage and blending services, rail and truck rack loading/unloading, along with petroleum processing services in the East Coast and Gulf Coast regions of the United States and in the Caribbean. The Merchant Services segment is a wholesale distributor of petroleum products in the continental United States and in the Caribbean.
Western Gas Partners, Company Profile
Western Gas Partners, LP is a master limited partnership (MLP) that acquires, owns, develops and operates midstream energy assets. The Company is engaged in the business of gathering, processing, compressing, treating and transporting natural gas, condensate, natural gas liquids (NGLs) and crude oil in the United States. The Company provides midstream services for Anadarko Petroleum Corporation (Anadarko), as well as for third-party producers and customers. The Company’s operations and activities are managed by its general partner, which is indirectly controlled by Anadarko through Western Gas Equity Partners, LP (WGP). As of December 31, 2016, its assets and investments consisted of gathering systems, treating facilities, natural gas processing plants/trains, NGL pipelines, natural gas pipelines and oil pipelines. These assets and investments are located in the Rocky Mountains (Colorado, Utah and Wyoming), North-central Pennsylvania and Texas.
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