Reviewing ONEOK (OKE) & Enterprise Products Partners (EPD)

ONEOK (NYSE: OKE) and Enterprise Products Partners (NYSE:EPD) are both large-cap energy companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, earnings, valuation, institutional ownership, risk, profitability and analyst recommendations.

Valuation & Earnings

This table compares ONEOK and Enterprise Products Partners’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
ONEOK $8.92 billion 2.67 $352.03 million $1.60 36.26
Enterprise Products Partners $29.24 billion 1.90 $2.80 billion $1.11 23.18

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

Dividends

ONEOK pays an annual dividend of $3.08 per share and has a dividend yield of 5.3%. Enterprise Products Partners pays an annual dividend of $1.70 per share and has a dividend yield of 6.6%. ONEOK pays out 192.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Enterprise Products Partners pays out 153.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. ONEOK has increased its dividend for 15 consecutive years and Enterprise Products Partners has increased its dividend for 19 consecutive years. Enterprise Products Partners is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares ONEOK and Enterprise Products Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ONEOK 3.76% 9.25% 2.53%
Enterprise Products Partners 9.57% 12.53% 5.47%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for ONEOK and Enterprise Products Partners, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ONEOK 0 6 7 0 2.54
Enterprise Products Partners 0 1 15 0 2.94

ONEOK presently has a consensus price target of $59.64, suggesting a potential upside of 2.79%. Enterprise Products Partners has a consensus price target of $31.12, suggesting a potential upside of 20.93%. Given Enterprise Products Partners’ stronger consensus rating and higher possible upside, analysts clearly believe Enterprise Products Partners is more favorable than ONEOK.

Insider and Institutional Ownership

66.2% of ONEOK shares are held by institutional investors. Comparatively, 36.7% of Enterprise Products Partners shares are held by institutional investors. 1.0% of ONEOK shares are held by company insiders. Comparatively, 37.5% of Enterprise Products Partners shares are held by company insiders. 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.

Risk and Volatility

ONEOK has a beta of 1.26, indicating that its share price is 26% more volatile than the S&P 500. Comparatively, Enterprise Products Partners has a beta of 0.81, indicating that its share price is 19% less volatile than the S&P 500.

Summary

Enterprise Products Partners beats ONEOK on 12 of the 17 factors compared between the two stocks.

ONEOK Company Profile

ONEOK, Inc. is an energy midstream service provider in the United States. The Company owns and operates natural gas liquids (NGL) systems, and is engaged in the gathering, processing, storage and transportation of natural gas. THe Company’s operations include a 38,000-mile integrated network of NGL and natural gas pipelines, processing plants, fractionators and storage facilities in the Mid-Continent, Williston, Permian and Rocky Mountain regions. The Company operates through three business segments. The Natural Gas Gathering and Processing segment provides midstream services to contracted producers in North Dakota, Montana, Wyoming, Kansas and Oklahoma. The Natural Gas Liquids segment owns and operates facilities that gather, fractionate, treat and distribute NGLs and store NGL products primarily in the Mid-Continental, Permian Basin and the Rocky Mountain regions. The Natural Gas Pipelines segment provides transportation and storage services to end users.

Enterprise Products Partners Company Profile

Enterprise Products Partners L.P. (Enterprise) is a provider of midstream energy services to producers and consumers of natural gas, natural gas liquids (NGLs), crude oil, petrochemicals and refined products in North America. The Company’s segments include NGL Pipelines & Services; Crude Oil Pipelines & Services; Natural Gas Pipelines & Services, and Petrochemical & Refined Products Services. The Company’s midstream energy operations include natural gas gathering, treating, processing, transportation and storage; NGL transportation, fractionation, storage, and import and export terminals, including liquefied petroleum gas (LPG); crude oil gathering, transportation, storage and terminals; petrochemical and refined products transportation, storage, export and import terminals, and related services, and a marine transportation business that operates primarily on the United States inland and Intracoastal Waterway systems.

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