Buckeye Partners (NYSE: BPL) and Kinder Morgan (NYSE:KMI) are both mid-cap oils/energy companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, institutional ownership, risk, dividends, valuation and earnings.
Insider and Institutional Ownership
70.2% of Buckeye Partners shares are owned by institutional investors. Comparatively, 60.8% of Kinder Morgan shares are owned by institutional investors. 0.4% of Buckeye Partners shares are owned by company insiders. Comparatively, 14.0% of Kinder Morgan shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Volatility & Risk
Buckeye Partners has a beta of 1.1, meaning that its share price is 10% more volatile than the S&P 500. Comparatively, Kinder Morgan has a beta of 0.62, meaning that its share price is 38% less volatile than the S&P 500.
This is a summary of recent ratings and recommmendations for Buckeye Partners and Kinder Morgan, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Buckeye Partners currently has a consensus price target of $65.00, indicating a potential upside of 18.14%. Kinder Morgan has a consensus price target of $22.73, indicating a potential upside of 19.59%. Given Kinder Morgan’s stronger consensus rating and higher probable upside, analysts clearly believe Kinder Morgan is more favorable than Buckeye Partners.
This table compares Buckeye Partners and Kinder Morgan’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Earnings & Valuation
This table compares Buckeye Partners and Kinder Morgan’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Buckeye Partners||$3.25 billion||2.48||$535.60 million||$3.27||16.83|
|Kinder Morgan||$13.71 billion||3.10||$708.00 million||$0.01||1,901.00|
Kinder Morgan has higher revenue and earnings than Buckeye Partners. Buckeye Partners is trading at a lower price-to-earnings ratio than Kinder Morgan, indicating that it is currently the more affordable of the two stocks.
Buckeye Partners pays an annual dividend of $5.05 per share and has a dividend yield of 9.2%. Kinder Morgan pays an annual dividend of $0.50 per share and has a dividend yield of 2.6%. Buckeye Partners pays out 154.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Kinder Morgan pays out 5,000.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Kinder Morgan has raised its dividend for 15 consecutive years. Buckeye Partners is clearly the better dividend stock, given its higher yield and lower payout ratio.
Kinder Morgan beats Buckeye Partners on 9 of the 17 factors compared between the two stocks.
About Buckeye Partners
Buckeye Partners, L.P. (Buckeye) owns and operates a network of integrated assets providing midstream logistic solutions, primarily consisting of the transportation, storage, processing and marketing of liquid petroleum products. Its segments include Domestic Pipelines & Terminals, Global Marine Terminals and Merchant Services. As of December 31, 2016, the Domestic Pipelines & Terminals segment owned and operated approximately 6,000 miles of pipeline located primarily in the northeastern and upper Midwestern portions of the United States, and serviced approximately 110 delivery locations. The Global Marine Terminals segment provides marine accessible bulk storage and blending services, rail and truck rack loading/unloading, along with petroleum processing services in the East Coast and Gulf Coast regions of the United States and in the Caribbean. The Merchant Services segment is a wholesale distributor of petroleum products in the continental United States and in the Caribbean.
About Kinder Morgan
Kinder Morgan, Inc. is an energy infrastructure company. It operates through five segments. Its Natural Gas Pipelines segment is engaged in the ownership and operation of interstate and intrastate natural gas pipeline and storage systems, and liquefied natural gas facilities, among others. Its CO2 segment is engaged in the production, transportation and marketing of carbon dioxide (CO2) to oil fields and the ownership and operation of a crude oil pipeline system, among others. Its Terminals segment is engaged in the ownership and/or operation of liquids and bulk terminal facilities located throughout the United States and portions of Canada, and Jones Act tankers. Its Products Pipelines segment is engaged in the ownership and operation of refined petroleum products, natural gas liquids and crude oil and condensate pipelines. Its Kinder Morgan Canada segment is engaged in the ownership and operation of the Trans Mountain pipeline system and Jet Fuel aviation turbine fuel pipeline.
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