Contrasting Buckeye Partners (BPL) & Phillips 66 Partners (PSXP)

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

Analyst Ratings

This is a summary of current ratings and recommmendations for Buckeye Partners and Phillips 66 Partners, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Buckeye Partners 1 10 2 0 2.08
Phillips 66 Partners 0 5 8 0 2.62

Buckeye Partners presently has a consensus price target of $51.38, indicating a potential upside of 41.99%. Phillips 66 Partners has a consensus price target of $56.88, indicating a potential upside of 12.16%. Given Buckeye Partners’ higher possible upside, equities analysts clearly believe Buckeye Partners is more favorable than Phillips 66 Partners.

Institutional & Insider Ownership

74.0% of Buckeye Partners shares are owned by institutional investors. Comparatively, 42.4% of Phillips 66 Partners shares are owned by institutional investors. 0.5% of Buckeye Partners shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Buckeye Partners $3.65 billion 1.46 $478.80 million $3.32 10.90
Phillips 66 Partners $1.17 billion 5.28 $461.00 million $2.59 19.58

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

Profitability

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

Net Margins Return on Equity Return on Assets
Buckeye Partners 12.11% 9.58% 4.62%
Phillips 66 Partners 46.01% 33.24% 11.22%

Dividends

Buckeye Partners pays an annual dividend of $5.05 per share and has a dividend yield of 14.0%. Phillips 66 Partners pays an annual dividend of $2.86 per share and has a dividend yield of 5.6%. Buckeye Partners pays out 152.1% 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 110.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Buckeye Partners has raised its dividend for 15 consecutive years and Phillips 66 Partners has raised its dividend for 4 consecutive years. Buckeye Partners is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

Buckeye Partners has a beta of 1.18, indicating that its share price is 18% more volatile than the S&P 500. Comparatively, Phillips 66 Partners has a beta of 1.4, indicating that its share price is 40% more volatile than the S&P 500.

Summary

Phillips 66 Partners beats Buckeye Partners on 9 of the 17 factors compared between the two stocks.

Buckeye Partners Company Profile

Buckeye Partners, L.P. owns and operates liquid petroleum products pipelines in the United States and internationally. The company operates through three segments: Domestic Pipelines & Terminals, Global Marine Terminals, and Merchant Services. The Domestic Pipelines & Terminals segment transports liquid petroleum products, including gasoline, jet fuel, and various distillates; refined petroleum products; and crude oil. This segment also provides crude oil services, including train loading/unloading, storage, and throughput; and turn-key operations and maintenance, asset development, and construction services for third-party pipeline and energy assets, as well as operates and/or maintains third-party pipelines. It owns and operates approximately 6,000 miles of pipeline located primarily in the northeastern and upper midwestern portions of the United States, and services 110 delivery locations; 115 active terminals that provide bulk storage and throughput services with aggregate storage capacity of 56 million barrels; and 2 underground propane storage caverns. The Global Marine Terminals segment provides marine accessible bulk storage and blending, rail and truck rack loading/unloading, and petroleum processing services in the New York Harbor on the East Coast and Corpus Christi, Texas in the Gulf Coast region of the United States, as well as The Bahamas, Puerto Rico, and St. Lucia in the Caribbean, Northwest Europe, the Middle East, and Southeast Asia. This segment owns and operates 22 liquid petroleum products and crude oil terminals. The Merchant Services segment is involved in the wholesale distribution of refined petroleum products, including gasoline, natural gas liquids, propane, ethanol, and biodiesel, as well as petroleum distillates, such as heating oil, diesel fuel, kerosene, and fuel oil. Buckeye GP LLC serves as the general partner of the company. Buckeye Partners, L.P. was founded in 1886 and is based in Houston, Texas.

Phillips 66 Partners Company Profile

Phillips 66 Partners LP owns, operates, develops, and acquires crude oil, refined petroleum products, and natural gas liquids pipelines, terminals, and other transportation and midstream assets. The company operates pipeline assets in Lake Charles, Sweeny, Wood River, Borger/Ponca City, Billings, and Borger; terminal, rail rack, and storage assets in Louisiana, Texas, Illinois, Missouri, Kansas, Oklahoma, New Jersey, Washington, Wyoming, and Montana; marine assets in Lake Charles and Wood River; and natural gas liquids assets in Texas and Louisiana. Phillips 66 Partners GP LLC operates as the general partner of Phillips 66 Partners LP. The company was founded in 2013 and is headquartered in Houston, Texas. Phillips 66 Partners LP is a subsidiary of Phillips 66 Project Development Inc.

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