Reviewing EnLink Midstream Partners (NYSE:ENLK) & Tallgrass Energy Partners (TEP)

EnLink Midstream Partners (NYSE: ENLK) and Tallgrass Energy Partners (NYSE:TEP) are both mid-cap oils/energy companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, dividends, risk, institutional ownership, valuation, profitability and analyst recommendations.

Valuation & Earnings

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This table compares EnLink Midstream Partners and Tallgrass Energy Partners’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
EnLink Midstream Partners $5.74 billion 0.80 $148.90 million $0.03 438.00
Tallgrass Energy Partners $655.90 million 4.38 $433.99 million $3.77 10.41

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

Insider and Institutional Ownership

41.2% of EnLink Midstream Partners shares are owned by institutional investors. Comparatively, 61.1% of Tallgrass Energy Partners shares are owned by institutional investors. 0.2% of EnLink Midstream Partners shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings for EnLink Midstream Partners and Tallgrass Energy Partners, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
EnLink Midstream Partners 0 9 4 0 2.31
Tallgrass Energy Partners 0 5 6 0 2.55

EnLink Midstream Partners presently has a consensus target price of $17.27, suggesting a potential upside of 31.45%. Tallgrass Energy Partners has a consensus target price of $48.67, suggesting a potential upside of 24.02%. Given EnLink Midstream Partners’ higher probable upside, research analysts plainly believe EnLink Midstream Partners is more favorable than Tallgrass Energy Partners.

Dividends

EnLink Midstream Partners pays an annual dividend of $1.56 per share and has a dividend yield of 11.9%. Tallgrass Energy Partners pays an annual dividend of $3.86 per share and has a dividend yield of 9.8%. EnLink Midstream Partners pays out 5,200.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Tallgrass Energy Partners pays out 102.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Tallgrass Energy Partners has raised its dividend for 4 consecutive years.

Profitability

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

Net Margins Return on Equity Return on Assets
EnLink Midstream Partners 2.51% 3.43% 1.47%
Tallgrass Energy Partners 66.17% 28.25% 11.21%

Risk and Volatility

EnLink Midstream Partners has a beta of 2.13, indicating that its share price is 113% more volatile than the S&P 500. Comparatively, Tallgrass Energy Partners has a beta of 1.02, indicating that its share price is 2% more volatile than the S&P 500.

Summary

Tallgrass Energy Partners beats EnLink Midstream Partners on 11 of the 17 factors compared between the two stocks.

EnLink Midstream Partners Company Profile

EnLink Midstream Partners LP provides integrated midstream services across natural gas, crude oil, condensate, and NGL commodities. It focuses on gathering, transmission, processing, fractionation, storage, condensate stabilization, brine services and marketing, to producers of natural gas, NGLs, crude oil and condensate. The company was founded on July 12, 2002 and is headquartered in Dallas, TX.

Tallgrass Energy Partners Company Profile

Tallgrass Energy Partners, LP owns, operates, acquires and develops midstream energy assets in North America. The Company operates through three segments: Crude Oil Transportation & Logistics, Natural Gas Transportation & Logistics and Processing & Logistics. The Crude Oil Transportation & Logistics segment includes the ownership and operation of a Federal Energy Regulatory Commission (FERC) crude oil pipeline system, and crude oil storage and terminaling facilities. The Natural Gas Transportation & Logistics segment is engaged in the ownership and operation of FERC regulated interstate natural gas pipelines and integrated natural gas storage facilities. The Processing & Logistics segment is engaged in the ownership and operation of natural gas processing, treating and fractionation facilities; the provision of water business services primarily to the oil and gas exploration and production industry, and the transportation of natural gas liquids (NGLs).

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