Reviewing Mplx (MPLX) and Phillips 66 Partners (PSXP)

Mplx (NYSE: MPLX) and Phillips 66 Partners (NYSE:PSXP) are both oils/energy companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, profitability, analyst recommendations, valuation, risk, dividends and institutional ownership.

Profitability

This table compares Mplx and Phillips 66 Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Mplx 17.90% 6.99% 3.70%
Phillips 66 Partners 44.16% 26.73% 11.05%

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Mplx and Phillips 66 Partners, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Mplx 0 4 8 0 2.67
Phillips 66 Partners 0 5 6 0 2.55

Mplx currently has a consensus target price of $41.70, indicating a potential upside of 14.40%. Phillips 66 Partners has a consensus target price of $58.20, indicating a potential upside of 14.23%. Given Mplx’s stronger consensus rating and higher probable upside, analysts clearly believe Mplx is more favorable than Phillips 66 Partners.

Volatility & Risk

Mplx has a beta of 1.32, meaning that its share price is 32% more volatile than the S&P 500. Comparatively, Phillips 66 Partners has a beta of 1.4, meaning that its share price is 40% more volatile than the S&P 500.

Dividends

Mplx pays an annual dividend of $2.43 per share and has a dividend yield of 6.7%. Phillips 66 Partners pays an annual dividend of $2.71 per share and has a dividend yield of 5.3%. Mplx pays out 231.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Phillips 66 Partners pays out 106.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Mplx has increased its dividend for 4 consecutive years and Phillips 66 Partners has increased its dividend for 4 consecutive years.

Institutional & Insider Ownership

63.2% of Mplx shares are held by institutional investors. Comparatively, 36.9% of Phillips 66 Partners shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Mplx and Phillips 66 Partners’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Mplx $3.87 billion 3.91 $794.00 million $1.05 34.71
Phillips 66 Partners $1.17 billion 5.30 $461.00 million $2.55 19.98

Mplx has higher revenue and earnings than Phillips 66 Partners. Phillips 66 Partners is trading at a lower price-to-earnings ratio than Mplx, indicating that it is currently the more affordable of the two stocks.

Summary

Mplx beats Phillips 66 Partners on 8 of the 15 factors compared between the two stocks.

Mplx Company Profile

MPLX LP is a master limited partnership (MLP) formed by Marathon Petroleum Corporation (MPC) to own, operate, develop and acquire midstream energy infrastructure assets. The Company is engaged in the gathering, processing and transportation of natural gas; the gathering, transportation, fractionation, storage and marketing of natural gas liquids (NGLs), and the gathering, transportation and storage of crude oil and refined petroleum products. Its segments are Logistics and Storage (L&S), and Gathering and Processing (G&P). The L&S segment includes transportation and storage of crude oil, refined products and other hydrocarbon-based products. As of December 31, 2016, the G&P segment operated various natural gas gathering systems that had a combined 5,439 million cubic feet per day (mmcf/d) throughput capacity. As of December 31, 2016, its assets included infrastructure to support MPC, including approximately 2,900 miles of crude oil and refined product pipelines across nine states.

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.

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