Tallgrass Energy GP (NYSE: ENBL) and Enable Midstream Partners (NYSE:ENBL) are both mid-cap oils/energy companies, but which is the better business? We will compare the two businesses based on the strength of their profitability, earnings, risk, valuation, institutional ownership, dividends and analyst recommendations.
This is a breakdown of recent recommendations and price targets for Tallgrass Energy GP and Enable Midstream Partners, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Tallgrass Energy GP||1||2||3||0||2.33|
|Enable Midstream Partners||0||8||3||0||2.27|
Tallgrass Energy GP presently has a consensus target price of $23.17, indicating a potential upside of 4.54%. Enable Midstream Partners has a consensus target price of $18.13, indicating a potential upside of 5.07%. Given Enable Midstream Partners’ higher possible upside, analysts plainly believe Enable Midstream Partners is more favorable than Tallgrass Energy GP.
Insider & Institutional Ownership
31.8% of Tallgrass Energy GP shares are owned by institutional investors. Comparatively, 20.0% of Enable Midstream Partners shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Valuation and Earnings
This table compares Tallgrass Energy GP and Enable Midstream Partners’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Tallgrass Energy GP||$655.90 million||6.24||-$128.72 million||$0.76||29.16|
|Enable Midstream Partners||$2.80 billion||2.67||$436.00 million||$0.92||18.75|
Enable Midstream Partners has higher revenue and earnings than Tallgrass Energy GP. Enable Midstream Partners is trading at a lower price-to-earnings ratio than Tallgrass Energy GP, indicating that it is currently the more affordable of the two stocks.
Tallgrass Energy GP pays an annual dividend of $1.95 per share and has a dividend yield of 8.8%. Enable Midstream Partners pays an annual dividend of $1.27 per share and has a dividend yield of 7.4%. Tallgrass Energy GP pays out 256.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Enable Midstream Partners pays out 138.0% 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 GP has raised its dividend for 2 consecutive years. Tallgrass Energy GP is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Volatility and Risk
Tallgrass Energy GP has a beta of 1.88, indicating that its share price is 88% more volatile than the S&P 500. Comparatively, Enable Midstream Partners has a beta of 1.86, indicating that its share price is 86% more volatile than the S&P 500.
This table compares Tallgrass Energy GP and Enable Midstream Partners’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Tallgrass Energy GP||-17.96%||2.54%||1.09%|
|Enable Midstream Partners||14.03%||5.91%||3.71%|
Enable Midstream Partners beats Tallgrass Energy GP on 8 of the 15 factors compared between the two stocks.
Tallgrass Energy GP Company Profile
Tallgrass Energy GP, LP, through its interests in Tallgrass Equity, LLC, provides crude oil transportation services to customers in Wyoming, Colorado, and the surrounding regions of the United States. The company operates through three segments: Natural Gas Transportation; Crude Oil Transportation; and Gathering, Processing & Terminalling. It also provides natural gas transportation and storage services for customers in the Rocky Mountain, Midwest, and Appalachian regions; natural gas and crude oil gathering and processing services for customers in Wyoming; and natural gas liquids (NGLs) transportation services in Northeast Colorado and Wyoming. In addition, the company offers water business services, including freshwater transportation, and produced water gathering and disposal in Colorado, Texas, and Wyoming; crude oil storage and terminalling services in Colorado; and marketing services for NGLs and crude oil. Tallgrass Energy GP, LP was founded in 2013 and is based in Leawood, Kansas.
Enable Midstream Partners Company Profile
Enable Midstream Partners, LP owns, operates, and develops midstream energy infrastructure assets in the United States. The company operates in two segments, Gathering and Processing; and Transportation and Storage. The Gathering and Processing segment provides natural gas gathering, processing, and fractionation services in the Anadarko, Arkoma, and Ark-La-Tex basins, as well as crude oil gathering services in the Bakken Shale formation of the Williston Basin for its producer customers. The Transportation and Storage segment offers interstate and intrastate natural gas pipeline transportation and storage services to natural gas producers, utilities, and industrial customers. The company's natural gas gathering and processing assets are located in Oklahoma, Texas, Arkansas, and Louisiana; crude oil gathering assets are located in North Dakota; and natural gas transportation and storage assets extend from western Oklahoma and the Texas Panhandle to Louisiana, from Louisiana to Illinois, in Oklahoma, and from Louisiana to Alabama. As of December 31, 2017, its portfolio of midstream energy infrastructure assets included approximately 13,300 miles of gathering pipelines; 15 processing plants with 2.6 billion cubic feet per day of processing capacity; approximately 7,800 miles of interstate pipelines; approximately 2,200 miles of intrastate pipelines; and 8 natural gas storage facilities with 86.0 billion cubic feet of storage capacity. The company is based in Oklahoma City, Oklahoma. Enable Midstream Partners, LP is a subsidiary of CenterPoint Energy, Inc.
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