Southcross Energy Partners (NYSE: SXE) and Enbridge (NYSE:ENB) are both energy companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, earnings, institutional ownership, profitability, valuation, dividends and risk.
Volatility & Risk
Southcross Energy Partners has a beta of 4.2, meaning that its share price is 320% more volatile than the S&P 500. Comparatively, Enbridge has a beta of 0.56, meaning that its share price is 44% less volatile than the S&P 500.
This table compares Southcross Energy Partners and Enbridge’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Southcross Energy Partners||-13.74%||-16.59%||-7.83%|
Institutional and Insider Ownership
3.3% of Southcross Energy Partners shares are held by institutional investors. Comparatively, 64.8% of Enbridge shares are held by institutional investors. 23.8% of Southcross Energy Partners shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Enbridge pays an annual dividend of $2.09 per share and has a dividend yield of 6.1%. Southcross Energy Partners does not pay a dividend. Enbridge pays out 150.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Southcross Energy Partners has increased its dividend for 6 consecutive years and Enbridge has increased its dividend for 4 consecutive years.
Earnings & Valuation
This table compares Southcross Energy Partners and Enbridge’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Southcross Energy Partners||$548.72 million||0.26||-$94.94 million||($1.63)||-1.12|
|Enbridge||$34.94 billion||1.62||$2.25 billion||$1.39||24.65|
Enbridge has higher revenue and earnings than Southcross Energy Partners. Southcross Energy Partners is trading at a lower price-to-earnings ratio than Enbridge, indicating that it is currently the more affordable of the two stocks.
This is a summary of current ratings and target prices for Southcross Energy Partners and Enbridge, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Southcross Energy Partners||0||1||0||0||2.00|
Enbridge has a consensus price target of $51.25, suggesting a potential upside of 49.55%. Given Enbridge’s stronger consensus rating and higher possible upside, analysts plainly believe Enbridge is more favorable than Southcross Energy Partners.
Enbridge beats Southcross Energy Partners on 13 of the 17 factors compared between the two stocks.
About Southcross Energy Partners
Southcross Energy Partners, L.P. provides natural gas gathering, processing, treating, compression and transportation services and natural gas liquid (NGL) fractionation and transportation services. The Company also sources, purchases, transports and sells natural gas and NGLs. Its assets are located in South Texas, Mississippi and Alabama As of December 31, 2016, its assets consisted of gathering systems, intrastate pipelines, two natural gas processing plants, one fractionation facility, 20 compressor stations and a treating system. Its gathering systems and intrastate pipelines include South Texas and Mississippi/Alabama. The assets in its South Texas region are located between Montgomery County, which is north of Houston, and Webb and Dimmit Counties near the Texas-Mexico border. The assets in its Mississippi region are located principally in the southern half of the state and consist of intrastate pipeline system in Mississippi.
Enbridge Inc. is a Canada-based energy transportation and distribution company. The Company is engaged in delivering energy. It operates through five segments: Liquids Pipelines, Gas Distribution, Gas Pipelines and Processing, Green Power and Transmission, and Energy Services. Liquids Pipelines consists of common carrier and contract crude oil, natural gas liquids (NGL), and refined products pipelines and terminals, including Canadian Mainline, Lakehead Pipeline System, Mid-Continent and Gulf Coast and Regional Oil Sands System. Gas Distribution consists of its natural gas utility operations, the core of which is Enbridge Gas Distribution Inc. Green Power and Transmission consists of its investments in renewable energy assets and transmission facilities. Renewable energy assets consist of wind, solar, geothermal and waste heat recovery facilities in Canada. Energy Services undertake physical commodity marketing activity and logistical services, and oversee refinery supply services.
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