Delek Logistics Partners (DKL) vs. EnLink Midstream Partners (ENLK) Financial Analysis

EnLink Midstream Partners (NYSE: ENLK) and Delek Logistics Partners (NYSE:DKL) are both oils/energy companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, dividends, institutional ownership, risk, earnings, profitability and analyst recommendations.

Dividends

EnLink Midstream Partners pays an annual dividend of $1.56 per share and has a dividend yield of 10.1%. Delek Logistics Partners pays an annual dividend of $2.86 per share and has a dividend yield of 9.8%. EnLink Midstream Partners pays out -678.2% of its earnings in the form of a dividend. Delek Logistics Partners pays out 143.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. EnLink Midstream Partners has increased its dividend for 3 consecutive years and Delek Logistics Partners has increased its dividend for 2 consecutive years. EnLink Midstream Partners is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares EnLink Midstream Partners and Delek Logistics Partners’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
EnLink Midstream Partners $4.25 billion 1.27 -$565.20 million ($0.23) -67.39
Delek Logistics Partners $448.06 million 1.62 $62.80 million $1.99 14.65

Delek Logistics Partners has lower revenue, but higher earnings than EnLink Midstream Partners. EnLink Midstream Partners is trading at a lower price-to-earnings ratio than Delek Logistics Partners, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

41.7% of EnLink Midstream Partners shares are held by institutional investors. Comparatively, 25.1% of Delek Logistics Partners shares are held by institutional investors. 0.2% of EnLink Midstream Partners shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares EnLink Midstream Partners and Delek Logistics Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
EnLink Midstream Partners 0.76% 1.20% 0.53%
Delek Logistics Partners 12.86% -332.86% 15.79%

Analyst Recommendations

This is a breakdown of current recommendations for EnLink Midstream Partners and Delek Logistics Partners, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
EnLink Midstream Partners 0 6 4 0 2.40
Delek Logistics Partners 0 2 0 0 2.00

EnLink Midstream Partners currently has a consensus price target of $18.29, suggesting a potential upside of 17.97%. Delek Logistics Partners has a consensus price target of $32.50, suggesting a potential upside of 11.49%. Given EnLink Midstream Partners’ stronger consensus rating and higher probable upside, analysts plainly believe EnLink Midstream Partners is more favorable than Delek Logistics Partners.

Risk and Volatility

EnLink Midstream Partners has a beta of 2.08, indicating that its share price is 108% more volatile than the S&P 500. Comparatively, Delek Logistics Partners has a beta of 1.25, indicating that its share price is 25% more volatile than the S&P 500.

Summary

EnLink Midstream Partners beats Delek Logistics Partners on 11 of the 16 factors compared between the two stocks.

About EnLink Midstream Partners

EnLink Midstream Partners, LP is a midstream company. The Company’s business activities are conducted through its subsidiary, EnLink Midstream Operating, LP (the Operating Partnership) and the subsidiaries of the Operating Partnership. The Company operates through five segments: Texas, Oklahoma, Louisiana, Crude and Condensate, and Corporate. The Company focuses on providing midstream energy services, including gathering, processing, transmission, fractionation, storage, condensate stabilization, brine services and marketing to producers of natural gas, natural gas liquids (NGLs), crude oil and condensate. As of December 31, 2016, its midstream energy asset network included approximately 11,000 miles of pipelines, 20 natural gas processing plants, seven fractionators, barge and rail terminals, product storage facilities, purchasing and marketing capabilities, brine disposal wells, a crude oil trucking fleet, and equity investments in certain private midstream companies.

About Delek Logistics Partners

Delek Logistics Partners, LP owns and operates logistics and marketing assets for crude oil, and intermediate and refined products. The Company’s business primarily consists of certain crude oil, intermediate and refined products pipelines and transportation, storage, wholesale marketing, terminaling and offloading assets, which were previously owned, operated or held by Delek US Holdings, Inc. (Delek), and assets acquired from unrelated third parties. The Company operates through two segments: Pipelines and Transportation segment, and Wholesale Marketing and Terminalling segment. The Company engaged in the gathering, transporting and storing crude oil; storing intermediate products and feed stocks, and marketing, distributing, transporting, offloading and storing refined products. The Company also provides crude oil, intermediate and refined products transportation services for terminaling, and marketing services to third parties primarily in Texas, Tennessee and Arkansas.

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