Phillips 66 Partners (NYSE: PSXP) and Enterprise Products Partners L.P. (NYSE:EPD) are both mid-cap oils/energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, dividends, risk, valuation, analyst recommendations, profitability and earnings.
Valuation & Earnings
This table compares Phillips 66 Partners and Enterprise Products Partners L.P.’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Phillips 66 Partners||$781.00 million||6.90||$461.00 million||$2.43||20.06|
|Enterprise Products Partners L.P.||$26.33 billion||2.13||$5.06 billion||$1.27||20.58|
Enterprise Products Partners L.P. has higher revenue and earnings than Phillips 66 Partners. Phillips 66 Partners is trading at a lower price-to-earnings ratio than Enterprise Products Partners L.P., indicating that it is currently the more affordable of the two stocks.
Phillips 66 Partners pays an annual dividend of $2.46 per share and has a dividend yield of 5.0%. Enterprise Products Partners L.P. pays an annual dividend of $1.68 per share and has a dividend yield of 6.4%. Phillips 66 Partners pays out 101.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Enterprise Products Partners L.P. pays out 132.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Phillips 66 Partners has increased its dividend for 3 consecutive years and Enterprise Products Partners L.P. has increased its dividend for 18 consecutive years. Enterprise Products Partners L.P. is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares Phillips 66 Partners and Enterprise Products Partners L.P.’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Phillips 66 Partners||45.35%||23.01%||9.97%|
|Enterprise Products Partners L.P.||10.28%||12.04%||5.25%|
Volatility and Risk
Phillips 66 Partners has a beta of 1.52, meaning that its share price is 52% more volatile than the S&P 500. Comparatively, Enterprise Products Partners L.P. has a beta of 0.9, meaning that its share price is 10% less volatile than the S&P 500.
This is a summary of recent recommendations for Phillips 66 Partners and Enterprise Products Partners L.P., as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Phillips 66 Partners||1||1||9||0||2.73|
|Enterprise Products Partners L.P.||0||0||14||0||3.00|
Phillips 66 Partners currently has a consensus price target of $57.13, indicating a potential upside of 17.20%. Enterprise Products Partners L.P. has a consensus price target of $31.50, indicating a potential upside of 20.50%. Given Enterprise Products Partners L.P.’s stronger consensus rating and higher possible upside, analysts clearly believe Enterprise Products Partners L.P. is more favorable than Phillips 66 Partners.
Institutional & Insider Ownership
43.0% of Phillips 66 Partners shares are owned by institutional investors. Comparatively, 37.6% of Enterprise Products Partners L.P. shares are owned by institutional investors. 37.5% of Enterprise Products Partners L.P. shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Enterprise Products Partners L.P. beats Phillips 66 Partners on 9 of the 17 factors compared between the two stocks.
Phillips 66 Partners Company Profile
Phillips 66 Partners LP (Phillips 66) owns, operates, develops and acquires fee-based crude oil, refined petroleum product and natural gas liquids (NGL) pipelines, terminals and other transportation and midstream assets. The Company’s assets consist of systems, such as Clifton Ridge Crude System, Eagle Ford Gathering System, Ponca Crude System, Billings Crude System, Borger Crude System, Sweeny to Pasadena Products System, Hartford Connector Products System, Gold Line Products System, Cross-Channel Connector Products System, Ponca Products System, Billings Products System, Bayway Products System, Standish Pipeline, Borger Products System, River Parish NGL System, Medford Spheres, Bayway Rail Rack, Ferndale Rail Rack, Sand Hills/Southern Hills Joint Ventures, Explorer Pipeline Joint Venture, Bakken Joint Ventures, Bayou Bridge Pipeline Joint Venture, STACK Pipeline Joint Venture, and Sweeny Fractionator and Clemens Caverns.
Enterprise Products Partners L.P. Company Profile
Enterprise Products Partners L.P. (Enterprise) is a provider of midstream energy services to producers and consumers of natural gas, natural gas liquids (NGLs), crude oil, petrochemicals and refined products in North America. The Company’s segments include NGL Pipelines & Services; Crude Oil Pipelines & Services; Natural Gas Pipelines & Services, and Petrochemical & Refined Products Services. The Company’s midstream energy operations include natural gas gathering, treating, processing, transportation and storage; NGL transportation, fractionation, storage, and import and export terminals, including liquefied petroleum gas (LPG); crude oil gathering, transportation, storage and terminals; petrochemical and refined products transportation, storage, export and import terminals, and related services, and a marine transportation business that operates primarily on the United States inland and Intracoastal Waterway systems.
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