Critical Comparison: Energy Transfer LP Unit (NYSE:ET) versus Southcross Energy Partners (NYSE:SXE)

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Energy Transfer LP Unit (NYSE:ET) and Southcross Energy Partners (NYSE:SXE) are both oils/energy companies, but which is the better stock? We will contrast the two businesses based on the strength of their dividends, profitability, risk, analyst recommendations, valuation, earnings and institutional ownership.

Analyst Ratings

This is a breakdown of current ratings for Energy Transfer LP Unit and Southcross Energy Partners, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Energy Transfer LP Unit 0 1 6 0 2.86
Southcross Energy Partners 0 0 0 0 N/A

Energy Transfer LP Unit currently has a consensus price target of $19.92, suggesting a potential upside of 49.75%. Given Energy Transfer LP Unit’s higher probable upside, analysts plainly believe Energy Transfer LP Unit is more favorable than Southcross Energy Partners.

Profitability

This table compares Energy Transfer LP Unit and Southcross Energy Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Energy Transfer LP Unit 4.03% 7.61% 2.65%
Southcross Energy Partners -10.77% -14.07% -6.20%

Insider and Institutional Ownership

56.9% of Energy Transfer LP Unit shares are owned by institutional investors. Comparatively, 1.4% of Southcross Energy Partners shares are owned by institutional investors. 3.3% of Energy Transfer LP Unit shares are owned by insiders. Comparatively, 23.8% of Southcross Energy Partners shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Dividends

Energy Transfer LP Unit pays an annual dividend of $1.22 per share and has a dividend yield of 9.2%. Southcross Energy Partners does not pay a dividend. Energy Transfer LP Unit pays out 106.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Southcross Energy Partners has increased its dividend for 5 consecutive years.

Volatility and Risk

Energy Transfer LP Unit has a beta of 1.54, indicating that its share price is 54% more volatile than the S&P 500. Comparatively, Southcross Energy Partners has a beta of 4.59, indicating that its share price is 359% more volatile than the S&P 500.

Valuation and Earnings

This table compares Energy Transfer LP Unit and Southcross Energy Partners’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Energy Transfer LP Unit $54.09 billion 0.64 $1.66 billion $1.15 11.57
Southcross Energy Partners $665.95 million 0.00 -$67.59 million N/A N/A

Energy Transfer LP Unit has higher revenue and earnings than Southcross Energy Partners.

Summary

Energy Transfer LP Unit beats Southcross Energy Partners on 10 of the 14 factors compared between the two stocks.

Energy Transfer LP Unit Company Profile

Energy Transfer LP provides energy-related services in the United States and China. The company owns and operates approximately 9,400 miles of natural gas transportation pipelines and three natural gas storage facilities in Texas; and approximately 12,200 miles of interstate natural gas pipelines. It sells natural gas to electric utilities, independent power plants, local distribution companies, industrial end-users, and other marketing companies. The company owns and operates natural gas gathering and natural gas liquid (NGL) pipelines, processing plants, treating facilities, and conditioning facilities in Texas, New Mexico, West Virginia, Pennsylvania, Ohio, and Louisiana; natural gas gathering, oil pipeline, and oil stabilization facilities in South Texas; a natural gas gathering system in Ohio; and transportation and supply of water to natural gas producers in Pennsylvania. It also owns approximately 4,769 miles of NGL pipelines; NGL and propane fractionation facilities; NGL storage facilities with working storage capacity of approximately 45 million barrels (Bbls); and other NGL storage assets and terminals with an aggregate storage capacity of approximately 11 million Bbls. The company also sells gasoline, middle distillates, and motor fuel at retail, as well as crude oil, NGLs, and refined products; operates convenience stores; and distributes motor fuels and other petroleum products. It provides natural gas compression services; carbon dioxide and hydrogen sulfide removal, natural gas cooling, dehydration, and British thermal unit management services; and manages coal and natural resources properties, as well as sells standing timber, leases coal-related infrastructure facilities, collects oil and gas royalties, and generates a total of 75 megawatts electrical power. The company was formerly known as Energy Transfer Equity, L.P. and changed its name to Energy Transfer LP in October 2018. Energy Transfer LP was founded in 2002 and is based in Dallas, Texas.

Southcross Energy Partners Company Profile

Southcross Energy Partners, L.P., together with its subsidiaries, provides natural gas gathering, processing, treating, compression, and transportation services in the United States. The company also offers natural gas liquid (NGL) fractionation and transportation services. In addition, it supplies natural gas to industrial, commercial, and power generation customers, as well as local distribution companies. The company operates 2 gas processing plants, 1 fractionation plant, and gathering and transportation pipelines in South Texas, Mississippi, and Alabama. Southcross Energy Partners GP, LLC operates as a general partner of Southcross Energy Partners, L.P. The company was founded in 2009 and is headquartered in Dallas, Texas. Southcross Energy Partners, L.P. is a subsidiary of Southcross Holdings LP.

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