Contrasting Penntex Midstream Partners (PTXP) and Columbia Pipeline Partners (CPPL)

Columbia Pipeline Partners (NYSE: CPPL) and Penntex Midstream Partners (NASDAQ:PTXP) are both small-cap oil & gas transportation services – nec companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, risk, analyst recommendations, dividends, valuation, earnings and profitability.

Analyst Ratings

This is a summary of current ratings and price targets for Columbia Pipeline Partners and Penntex Midstream Partners, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Columbia Pipeline Partners 0 1 0 0 2.00
Penntex Midstream Partners 0 6 1 0 2.14

Penntex Midstream Partners has a consensus target price of $19.17, suggesting a potential downside of 4.17%. Given Penntex Midstream Partners’ stronger consensus rating and higher probable upside, analysts clearly believe Penntex Midstream Partners is more favorable than Columbia Pipeline Partners.

Profitability

This table compares Columbia Pipeline Partners and Penntex Midstream Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Columbia Pipeline Partners 6.40% 0.92% 0.84%
Penntex Midstream Partners 34.54% 11.00% 5.81%

Institutional & Insider Ownership

88.2% of Columbia Pipeline Partners shares are owned by institutional investors. Comparatively, 55.0% of Penntex Midstream Partners shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Columbia Pipeline Partners and Penntex Midstream Partners’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Columbia Pipeline Partners N/A N/A N/A $0.73 23.49
Penntex Midstream Partners N/A N/A N/A $0.26 76.92

Columbia Pipeline Partners is trading at a lower price-to-earnings ratio than Penntex Midstream Partners, indicating that it is currently the more affordable of the two stocks.

Dividends

Columbia Pipeline Partners pays an annual dividend of $0.79 per share and has a dividend yield of 4.6%. Penntex Midstream Partners pays an annual dividend of $1.18 per share and has a dividend yield of 5.9%. Columbia Pipeline Partners pays out 108.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Penntex Midstream Partners pays out 453.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

Penntex Midstream Partners beats Columbia Pipeline Partners on 7 of the 10 factors compared between the two stocks.

About Columbia Pipeline Partners

Columbia Pipeline Partners LP (the Partnership) is a limited partnership company operating a portfolio of pipelines, storage and related midstream assets. It is engaged in interstate gas transportation and storage services for local distribution companies (LDCs), marketers and industrial and commercial customers located in northeastern, mid-Atlantic, Midwestern and southern states, and the District of Columbia along with unregulated businesses that include midstream services, including gathering, treating, conditioning, processing, compression and liquids handling, and development of mineral rights positions. The Company owns, operates and develops a portfolio of pipelines, storage and related midstream assets. The Company has a general partner interest in CPG OpCo LP (Columbia OpCo), as well as a limited partner interest in Columbia OpCo, a limited partnership that owns the natural gas transmission and storage assets of Columbia Energy Group (CEG).

About Penntex Midstream Partners

PennTex Midstream Partners, LP, focuses on owning, operating, acquiring and developing midstream energy infrastructure assets in North America. The Company owns and operates midstream gathering, processing and transportation assets in northern Louisiana. The Company provides natural gas gathering and processing and residue gas and natural gas liquid (NGL) transportation services to producers focused on the Cotton Valley formation in northern Louisiana. The Company’s assets primarily consisted of natural gas gathering pipeline, two 200 million cubic feet per day (MMcf/d) design-capacity cryogenic natural gas processing plants, and residue gas and NGL transportation pipelines, as of December 31, 2016. In addition to providing midstream services to its primary customer with its existing assets, the Company pursues other opportunities for organic development and growth as producers in its region continue to develop their acreage.

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