Analyzing Enterprise Products Partners (NYSE:EPD) & Archrock (NYSE:AROC)
Enterprise Products Partners (NYSE:EPD) and Archrock (NYSE:AROC) are both oils/energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, institutional ownership, dividends, risk, analyst recommendations, earnings and valuation.
Valuation and Earnings
This table compares Enterprise Products Partners and Archrock’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Enterprise Products Partners||$36.53 billion||1.69||$4.17 billion||$1.94||14.52|
|Archrock||$904.44 million||1.30||$21.06 million||$0.48||18.85|
Enterprise Products Partners pays an annual dividend of $1.76 per share and has a dividend yield of 6.3%. Archrock pays an annual dividend of $0.58 per share and has a dividend yield of 6.4%. Enterprise Products Partners pays out 90.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Archrock pays out 120.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Enterprise Products Partners has increased its dividend for 20 consecutive years.
This table compares Enterprise Products Partners and Archrock’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Enterprise Products Partners||14.26%||20.02%||8.40%|
Insider and Institutional Ownership
36.5% of Enterprise Products Partners shares are held by institutional investors. Comparatively, 89.0% of Archrock shares are held by institutional investors. 37.5% of Enterprise Products Partners shares are held by company insiders. Comparatively, 2.0% of Archrock shares are held by company 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.
This is a summary of current ratings and price targets for Enterprise Products Partners and Archrock, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Enterprise Products Partners||0||0||11||1||3.08|
Enterprise Products Partners currently has a consensus price target of $33.82, indicating a potential upside of 20.09%. Archrock has a consensus price target of $15.50, indicating a potential upside of 71.27%. Given Archrock’s higher possible upside, analysts clearly believe Archrock is more favorable than Enterprise Products Partners.
Volatility & Risk
Enterprise Products Partners has a beta of 0.88, suggesting that its stock price is 12% less volatile than the S&P 500. Comparatively, Archrock has a beta of 2.78, suggesting that its stock price is 178% more volatile than the S&P 500.
Enterprise Products Partners beats Archrock on 13 of the 18 factors compared between the two stocks.
Enterprise Products Partners Company Profile
Enterprise Products Partners L.P. provides midstream energy services to producers and consumers of natural gas, natural gas liquids (NGLs), crude oil, petrochemicals, and refined products. The company operates through four segments: NGL Pipelines & Services, Crude Oil Pipelines & Services, Natural Gas Pipelines & Services, and Petrochemical & Refined Products Services. The NGL Pipelines & Services segment offers natural gas processing and related NGL marketing services, as well as NGL export docks and related services. It operates approximately 19,200 miles of NGL pipelines; NGL and related product storage facilities; 16 NGL fractionators; and liquefied petroleum gas and ethane export terminals, and related operations. The Crude Oil Pipelines & Services segment operates approximately 5,300 miles of crude oil pipelines; and crude oil storage and marine terminals located in Oklahoma and Texas, as well as a fleet of 360 tractor-trailer tank trucks used to transport crude oil. It also engages in crude oil marketing activities. The Natural Gas Pipelines & Services segment operates approximately 19,700 miles of natural gas pipeline systems to gather and transport natural gas in Colorado, Louisiana, New Mexico, Texas, and Wyoming. It leases underground salt dome natural gas storage facilities in Texas and Louisiana; owns an underground salt dome storage cavern in Texas; and markets natural gas. The Petrochemical & Refined Products Services segment operates propylene fractionation and related activities, including 800 miles of pipelines; butane isomerization complex and related deisobutanizer units; and octane enhancement and high purity isobutylene production facilities. It also operates approximately 4,100 miles of refined products pipelines; and terminals, as well as provides refined products marketing and marine transportation services. The company was founded in 1968 and is headquartered in Houston, Texas.
Archrock Company Profile
Archrock, Inc. engages in the provision of operations, maintenance, service, and equipment for oil and natural gas production, processing, and transportation applications. It operates through the Contract Operations and Aftermarket Services segments. The Contract Operations segment is comprised of equity investment in the partnership, in addition to the owned fleet of natural gas compression equipment that the company use to provide operations services. The Aftermarket Services segment sell parts and components, provides operations, maintenance, overhaul, and reconfiguration services to customers. The company was founded on February 2, 2007 and is headquartered in Houston, TX.
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