Critical Survey: Kinder Morgan (KMI) versus EnLink Midstream (ENLC)
Kinder Morgan (NYSE: KMI) and EnLink Midstream (NYSE:ENLC) are both oils/energy companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, analyst recommendations, institutional ownership, risk, valuation, earnings and profitability.
This is a breakdown of recent ratings and recommmendations for Kinder Morgan and EnLink Midstream, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Risk & Volatility
Kinder Morgan has a beta of 0.64, suggesting that its stock price is 36% less volatile than the S&P 500. Comparatively, EnLink Midstream has a beta of 2.46, suggesting that its stock price is 146% more volatile than the S&P 500.
Insider and Institutional Ownership
62.6% of Kinder Morgan shares are owned by institutional investors. Comparatively, 33.7% of EnLink Midstream shares are owned by institutional investors. 14.2% of Kinder Morgan shares are owned by company insiders. Comparatively, 1.2% of EnLink Midstream shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Valuation & Earnings
This table compares Kinder Morgan and EnLink Midstream’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Kinder Morgan||$13.71 billion||2.51||$183.00 million||$0.66||23.61|
|EnLink Midstream||$5.74 billion||0.46||$212.80 million||($0.05)||-291.00|
EnLink Midstream has lower revenue, but higher earnings than Kinder Morgan. EnLink Midstream is trading at a lower price-to-earnings ratio than Kinder Morgan, indicating that it is currently the more affordable of the two stocks.
This table compares Kinder Morgan and EnLink Midstream’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Kinder Morgan pays an annual dividend of $0.50 per share and has a dividend yield of 3.2%. EnLink Midstream pays an annual dividend of $1.04 per share and has a dividend yield of 7.1%. Kinder Morgan pays out 75.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. EnLink Midstream pays out -2,080.0% of its earnings in the form of a dividend. EnLink Midstream is clearly the better dividend stock, given its higher yield and lower payout ratio.
Kinder Morgan beats EnLink Midstream on 11 of the 16 factors compared between the two stocks.
Kinder Morgan Company Profile
Kinder Morgan, Inc. operates as an energy infrastructure company in North America. It operates through Natural Gas Pipelines, CO2, Terminals, Products Pipelines, and Kinder Morgan Canada segments. The Natural Gas Pipelines segment owns and operates interstate and intrastate natural gas pipeline and storage systems; natural gas and crude oil gathering systems, and natural gas processing and treating facilities; natural gas liquids (NGL) fractionation facilities and transportation systems; and liquefied natural gas facilities. The CO2 segment produces, transports, and markets CO2 for recovering crude oil from mature oil fields; and owns interests in/or operates oil fields and gas processing plants, as well as operates a crude oil pipeline system in West Texas. The Terminals segment owns and operates liquids and bulk terminals that transload and store refined petroleum products, crude oil, chemicals, and ethanol, as well as bulk products, including coke, steel, and coal; and owns tankers. The Products Pipelines segment owns and operates refined petroleum products, NGL, and crude oil and condensate pipelines; and associated product terminals and petroleum pipeline transmix facilities. The Kinder Morgan Canada segment owns and operates Trans Mountain pipeline system that transports crude oil and refined petroleum products from Edmonton, Alberta, and Canada to marketing terminals and refineries in British Columbia, Canada, and the state of Washington; and Jet Fuel aviation turbine fuel pipeline that serves the Vancouver (Canada) International Airport. As of February 5, 2018, Kinder Morgan, Inc. owns or operates approximately 85,000 miles of pipelines and 152 terminals. The company was formerly known as Kinder Morgan Holdco LLC and changed its name to Kinder Morgan, Inc. in February 2011. Kinder Morgan, Inc. was founded in 1936 and is headquartered in Houston, Texas.
EnLink Midstream Company Profile
EnLink Midstream, LLC focuses on providing midstream energy services in the United States. It operates through five segments: Texas, Oklahoma, Louisiana, Crude and Condensate, and Corporate. The company is involved in gathering, compressing, treating, processing, transporting, storing, and selling natural gas; fractionating, transporting, storing, exporting, and selling natural gas liquids; and gathering, transporting, stabilizing, storing, and trans-loading crude oil, and condensate. Its midstream energy asset network includes approximately 11,000 miles of pipelines; 20 natural gas processing plants; 7 fractionators; barge and rail terminals; product storage facilities; brine disposal wells; and a crude oil trucking fleet. The company was founded in 2013 and is headquartered in Dallas, Texas. EnLink Midstream, LLC is a subsidiary of Devon Energy Corporation.
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