Magellan Midstream Partners (NYSE: MMP) and Delek Logistics Partners (NYSE:DKL) are both oils/energy companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, profitability, risk, valuation, institutional ownership, analyst recommendations and earnings.
Magellan Midstream Partners pays an annual dividend of $3.68 per share and has a dividend yield of 5.5%. Delek Logistics Partners pays an annual dividend of $2.90 per share and has a dividend yield of 9.8%. Magellan Midstream Partners pays out 96.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Delek Logistics Partners pays out 138.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Magellan Midstream Partners has increased its dividend for 8 consecutive years and Delek Logistics Partners has increased its dividend for 4 consecutive years.
This table compares Magellan Midstream Partners and Delek Logistics Partners’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Magellan Midstream Partners||34.67%||40.85%||12.31%|
|Delek Logistics Partners||12.90%||-292.19%||16.38%|
Insider & Institutional Ownership
62.3% of Magellan Midstream Partners shares are held by institutional investors. Comparatively, 24.6% of Delek Logistics Partners shares are held by institutional investors. 0.3% of Magellan Midstream 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.
Earnings and Valuation
This table compares Magellan Midstream Partners and Delek Logistics Partners’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Magellan Midstream Partners||$2.51 billion||6.04||$869.53 million||$3.81||17.41|
|Delek Logistics Partners||$538.08 million||1.37||$69.40 million||$2.09||14.14|
Magellan Midstream Partners has higher revenue and earnings than Delek Logistics Partners. Delek Logistics Partners is trading at a lower price-to-earnings ratio than Magellan Midstream Partners, indicating that it is currently the more affordable of the two stocks.
This is a summary of current recommendations and price targets for Magellan Midstream Partners and Delek Logistics Partners, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Magellan Midstream Partners||3||5||6||0||2.21|
|Delek Logistics Partners||1||2||0||0||1.67|
Magellan Midstream Partners currently has a consensus target price of $75.23, indicating a potential upside of 13.40%. Delek Logistics Partners has a consensus target price of $32.50, indicating a potential upside of 9.98%. Given Magellan Midstream Partners’ stronger consensus rating and higher possible upside, analysts plainly believe Magellan Midstream Partners is more favorable than Delek Logistics Partners.
Risk & Volatility
Magellan Midstream Partners has a beta of 0.72, suggesting that its stock price is 28% less volatile than the S&P 500. Comparatively, Delek Logistics Partners has a beta of 1.13, suggesting that its stock price is 13% more volatile than the S&P 500.
Magellan Midstream Partners beats Delek Logistics Partners on 14 of the 17 factors compared between the two stocks.
About Magellan Midstream Partners
Magellan Midstream Partners, L.P. engages in the transportation, storage, and distribution of refined petroleum products and crude oil in the United States. The company operates through Refined Products, Crude Oil, and Marine Storage segments. It operates refined products pipeline that transports gasoline, distillates, aviation fuels, and liquefied petroleum gases for independent refiners and integrated oil companies, wholesalers, retailers, traders, railroads, airlines, bio-fuel producers, and regional farm cooperatives; and provides services, including terminalling, ethanol and biodiesel unloading and loading, additive injection, custom blending, laboratory testing, and data services to shippers. The company also owns and operates crude oil pipelines and storage facilities; and marine terminals located along coastal waterways that provide distribution, storage, blending, inventory management, and additive injection services for refiners, marketers, traders, and other end users of petroleum products. As of December 31, 2017, it had 9,700-mile refined products pipeline system with 53 terminals, as well as 26 independent terminals; 1,100-mile ammonia pipeline system; approximately 2,200 miles of crude oil pipelines and storage facilities with an aggregate storage capacity of approximately 28 million barrels; and 5 marine terminals with an aggregate storage capacity of approximately 26 million barrels. The company serves as the general partner of Magellan GP, LLC. Magellan Midstream Partners, L.P. was founded in 2000 and is headquartered in Tulsa, Oklahoma.
About Delek Logistics Partners
Delek Logistics Partners, LP owns and operates logistics and marketing assets for crude oil, and intermediate and refined products in the United States. It operates in two segments, Pipelines and Transportation, and Wholesale Marketing and Terminalling. The Pipelines and Transportation segment consists of assets, including pipelines and trucks, and ancillary assets that provide crude oil gathering and crude oil, intermediate and finished products transportation, and storage services primarily in support of the Tyler and El Dorado refineries, as well as offers crude oil and other products transportation services to third parties. This segment operates approximately 400 miles of crude oil transportation pipelines; 406 miles of refined product pipelines; and approximately 600 miles of crude oil gathering and trunk lines with an aggregate of approximately 7.3 million barrels of active shell capacity. The Wholesale Marketing and Terminalling segment provides wholesale marketing, transporting, storing, and terminalling services related to refined products to independent third parties. Delek Logistics GP, LLC serves as the general partner of the company. Delek Logistics Partners, LP was founded in 2012 and is headquartered in Brentwood, Tennessee.
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