Contrasting BP Midstream Partners (BPMP) & Enbridge Energy Partners (EEP)

Enbridge Energy Partners (NYSE:EEP) and BP Midstream Partners (NYSE:BPMP) are both oils/energy companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, analyst recommendations, earnings, institutional ownership, dividends, valuation and risk.

Volatility and Risk

Enbridge Energy Partners has a beta of 1.29, meaning that its share price is 29% more volatile than the S&P 500. Comparatively, BP Midstream Partners has a beta of 0.7, meaning that its share price is 30% less volatile than the S&P 500.

Institutional & Insider Ownership

45.0% of Enbridge Energy Partners shares are held by institutional investors. Comparatively, 50.2% of BP Midstream Partners shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

Enbridge Energy Partners pays an annual dividend of $1.40 per share and has a dividend yield of 13.4%. BP Midstream Partners pays an annual dividend of $1.17 per share and has a dividend yield of 6.7%. Enbridge Energy Partners pays out 175.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. BP Midstream Partners pays out 557.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Enbridge Energy Partners is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a summary of recent ratings and price targets for Enbridge Energy Partners and BP Midstream Partners, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Enbridge Energy Partners 2 7 0 0 1.78
BP Midstream Partners 2 2 4 0 2.25

Enbridge Energy Partners presently has a consensus target price of $12.44, suggesting a potential upside of 19.31%. BP Midstream Partners has a consensus target price of $21.50, suggesting a potential upside of 23.71%. Given BP Midstream Partners’ stronger consensus rating and higher possible upside, analysts plainly believe BP Midstream Partners is more favorable than Enbridge Energy Partners.

Earnings and Valuation

This table compares Enbridge Energy Partners and BP Midstream Partners’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Enbridge Energy Partners $2.43 billion 1.40 $282.00 million $0.80 13.04
BP Midstream Partners $108.15 million 16.83 $60.87 million $0.21 82.76

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

Profitability

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

Net Margins Return on Equity Return on Assets
Enbridge Energy Partners 9.39% 5.92% 2.70%
BP Midstream Partners 102.40% 20.20% 19.59%

Summary

BP Midstream Partners beats Enbridge Energy Partners on 9 of the 15 factors compared between the two stocks.

About Enbridge Energy Partners

Enbridge Energy Partners, L.P. provides crude oil and liquid petroleum gathering, transportation, and storage services assets in the United States. The company's Lakehead system consists of approximately 4,212 miles of pipe and 74 pump stations located in the Great Lakes and Midwest regions of the United States. Its North Dakota crude oil system comprises approximately 660 miles, has 12 pump stations, delivery points, and storage facilities; and Mid-Continent system includes approximately 20 million barrels of storage capacity. The company serves integrated oil companies, independent oil producers, refiners, and marketers. Enbridge Energy Company, Inc. operates as a general partner of Enbridge Energy Partners, L.P. The company was formerly known as Lakehead Pipe Line Partners, L.P. and changed its name to Enbridge Energy Partners, L.P. in 2001. Enbridge Energy Partners, L.P. was founded in 1991 and is headquartered in Houston, Texas.

About BP Midstream Partners

BP Midstream Partners LP owns, acquires, operates, and develops pipelines and other midstream assets. It owns an onshore crude oil pipeline system, onshore refined products pipeline system, onshore diluent pipeline system, and offshore natural gas pipeline system, as well as interests in four offshore crude oil pipeline systems located in the United States. The company was founded in 2017 and is based in Houston, Texas. BP Midstream Partners LP is a subsidiary of BP Pipelines (North America) Inc.

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