American Midstream Partners (NYSE: AMID) and DCP Midstream Partners (NYSE:DCP) are both oils/energy companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, risk, earnings, valuation, profitability, analyst recommendations and dividends.
This is a summary of recent ratings and target prices for American Midstream Partners and DCP Midstream Partners, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|American Midstream Partners||0||2||0||0||2.00|
|DCP Midstream Partners||1||5||4||0||2.30|
This table compares American Midstream Partners and DCP Midstream Partners’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|American Midstream Partners||-18.07%||-36.28%||-8.70%|
|DCP Midstream Partners||2.71%||3.59%||1.86%|
Valuation and Earnings
This table compares American Midstream Partners and DCP Midstream Partners’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|American Midstream Partners||$655.98 million||1.11||-$131.27 million||($3.10)||-3.27|
|DCP Midstream Partners||$8.46 billion||0.58||$229.00 million||$0.43||80.19|
DCP Midstream Partners has higher revenue and earnings than American Midstream Partners. American Midstream Partners is trading at a lower price-to-earnings ratio than DCP Midstream Partners, indicating that it is currently the more affordable of the two stocks.
American Midstream Partners pays an annual dividend of $1.65 per share and has a dividend yield of 16.3%. DCP Midstream Partners pays an annual dividend of $3.12 per share and has a dividend yield of 9.0%. American Midstream Partners pays out -53.2% of its earnings in the form of a dividend. DCP Midstream Partners pays out 725.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. American Midstream Partners is clearly the better dividend stock, given its higher yield and lower payout ratio.
Insider and Institutional Ownership
43.1% of American Midstream Partners shares are owned by institutional investors. Comparatively, 56.6% of DCP Midstream Partners shares are owned by institutional investors. 5.4% of American Midstream Partners shares are owned by insiders. Comparatively, 0.0% of DCP Midstream Partners shares are owned by insiders. 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.
Volatility and Risk
American Midstream Partners has a beta of 1.03, suggesting that its stock price is 3% more volatile than the S&P 500. Comparatively, DCP Midstream Partners has a beta of 2.17, suggesting that its stock price is 117% more volatile than the S&P 500.
DCP Midstream Partners beats American Midstream Partners on 11 of the 16 factors compared between the two stocks.
American Midstream Partners Company Profile
American Midstream Partners, LP owns, operates, develops and acquires a portfolio of midstream energy assets. The Company provides midstream infrastructure that links producers of natural gas, crude oil, natural gas liquids (NGLs), condensate and specialty chemicals to numerous intermediate and end-use markets. Its segments include gathering and processing, transmission and terminals. Through its segments, it is engaged in the business of gathering, treating, processing, and transporting natural gas; gathering, transporting, storing, treating and fractionating NGLs; gathering, storing and transporting crude oil and condensates, and storing specialty chemical products. Its gathering and processing assets are primarily located in the Permian Basin of West Texas; the Cotton Valley/Haynesville Shale of East Texas; the Eagle Ford Shale of South Texas; the Bakken Shale of North Dakota, and offshore in the Gulf of Mexico.
DCP Midstream Partners Company Profile
DCP Midstream, LP, together with its subsidiaries, owns, operates, acquires, and develops a portfolio of midstream energy assets in the United States. The company operates in two segments, Gathering and Processing, and Logistics and Marketing. The Gathering and Processing segment is involved in gathering, compressing, treating, and processing natural gas; producing and fractionating natural gas liquids (NGLs); and recovering condensate. The Logistics and Marketing segment engages in transporting, trading, marketing, and storing natural gas and NGLs; fractionating NGLs; and wholesale propane logistics. As of February 13, 2018, it owned and operated approximately 60 plants and 63,000 miles of natural gas and NGLs pipelines with operations in 17 states. The company serves petrochemical and refining companies, and retail propane distributors. DCP Midstream GP, LP serves as the general partner of the company. The company was formerly known as DCP Midstream Partners, LP and changed its name to DCP Midstream, LP in January 2017. DCP Midstream, LP was founded in 2005 and is headquartered in Denver, Colorado.
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