Head-To-Head Contrast: Frontline (FRO) vs. EnLink Midstream Partners (ENLK)

Frontline (NYSE: FRO) and EnLink Midstream Partners (NYSE:ENLK) are both transportation companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, profitability, valuation, risk, earnings and dividends.

Volatility & Risk

Frontline has a beta of 1.87, suggesting that its share price is 87% more volatile than the S&P 500. Comparatively, EnLink Midstream Partners has a beta of 2.08, suggesting that its share price is 108% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Frontline and EnLink Midstream Partners, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Frontline 1 1 1 0 2.00
EnLink Midstream Partners 0 8 3 0 2.27

Frontline presently has a consensus target price of $5.67, indicating a potential upside of 14.25%. EnLink Midstream Partners has a consensus target price of $17.90, indicating a potential upside of 2.58%. Given Frontline’s higher possible upside, equities analysts clearly believe Frontline is more favorable than EnLink Midstream Partners.

Dividends

Frontline pays an annual dividend of $0.30 per share and has a dividend yield of 6.0%. EnLink Midstream Partners pays an annual dividend of $1.56 per share and has a dividend yield of 8.9%. Frontline pays out 1,000.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. EnLink Midstream Partners pays out -678.3% of its earnings in the form of a dividend. Frontline has increased its dividend for 2 consecutive years. EnLink Midstream Partners is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings and Valuation

This table compares Frontline and EnLink Midstream Partners’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Frontline $754.31 million 1.12 $117.01 million $0.03 165.39
EnLink Midstream Partners $4.25 billion 1.43 -$565.20 million ($0.23) -75.87

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

Institutional and Insider Ownership

13.2% of Frontline shares are held by institutional investors. Comparatively, 41.7% of EnLink Midstream Partners shares are held by institutional investors. 48.1% of Frontline shares are held by company insiders. Comparatively, 0.2% of EnLink Midstream Partners shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Frontline 0.29% 1.70% 0.79%
EnLink Midstream Partners 0.76% 1.20% 0.53%

Summary

EnLink Midstream Partners beats Frontline on 9 of the 17 factors compared between the two stocks.

About Frontline

Frontline Ltd. is a shipping company. The Company is engaged in the seaborne transportation of crude oil and oil products. Its tankers segment includes crude oil tankers and product tankers. As of December 31, 2016, the Company’s fleet consisted of 28 vessels owned by the Company (seven very large crude carriers (VLCCs), 10 Suezmax tankers and 11 Aframax/LR2 tankers); 13 vessels that are under capital leases (11 VLCCs and two Suezmax tankers); one VLCC that is recorded as an investment in finance lease; four vessels chartered-in for periods of 12 months, including extension options (two VLCCs and two Suezmax tankers); two VLCCs where cost/revenue is split equally with a third party (of which one is chartered-in by it and one by a third party); three medium range product tankers that are chartered-in on short term time charters with a remaining duration of less than two months, and five vessels that are under commercial management (two Suezmax tankers and three Aframax oil tankers).

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.

Receive News & Ratings for Frontline Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Frontline and related companies with MarketBeat.com's FREE daily email newsletter.

Leave a Reply