Critical Comparison: Enbridge (ENB) and Noble Midstream Partners (NBLX)

Enbridge (NYSE: ENB) and Noble Midstream Partners (NYSE:NBLX) are both oils/energy companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, profitability, dividends, earnings, analyst recommendations, valuation and risk.

Dividends

Enbridge pays an annual dividend of $1.96 per share and has a dividend yield of 5.0%. Noble Midstream Partners pays an annual dividend of $1.78 per share and has a dividend yield of 4.0%. Enbridge pays out 190.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Noble Midstream Partners pays out 67.2% of its earnings in the form of a dividend. Enbridge has increased its dividend for 5 consecutive years. Enbridge is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of recent recommendations for Enbridge and Noble Midstream Partners, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Enbridge 0 6 8 0 2.57
Noble Midstream Partners 0 2 10 0 2.83

Enbridge presently has a consensus target price of $54.86, indicating a potential upside of 40.19%. Noble Midstream Partners has a consensus target price of $41.90, indicating a potential downside of 5.20%. Given Enbridge’s higher possible upside, research analysts clearly believe Enbridge is more favorable than Noble Midstream Partners.

Insider & Institutional Ownership

63.4% of Enbridge shares are held by institutional investors. Comparatively, 78.6% of Noble Midstream Partners shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares Enbridge and Noble Midstream Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Enbridge 5.28% 6.04% 1.80%
Noble Midstream Partners 50.57% 31.64% 24.40%

Earnings & Valuation

This table compares Enbridge and Noble Midstream Partners’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Enbridge $31.95 billion 2.02 $5.92 billion $1.03 37.99
Noble Midstream Partners $203.73 million 7.80 $150.22 million $2.65 16.68

Enbridge has higher revenue and earnings than Noble Midstream Partners. Noble Midstream Partners is trading at a lower price-to-earnings ratio than Enbridge, indicating that it is currently the more affordable of the two stocks.

Summary

Noble Midstream Partners beats Enbridge on 9 of the 15 factors compared between the two stocks.

About Enbridge

Enbridge Inc. is a Canada-based energy transportation and distribution company. The Company is engaged in delivering energy. It operates through five segments: Liquids Pipelines, Gas Distribution, Gas Pipelines and Processing, Green Power and Transmission, and Energy Services. Liquids Pipelines consists of common carrier and contract crude oil, natural gas liquids (NGL), and refined products pipelines and terminals, including Canadian Mainline, Lakehead Pipeline System, Mid-Continent and Gulf Coast and Regional Oil Sands System. Gas Distribution consists of its natural gas utility operations, the core of which is Enbridge Gas Distribution Inc. Green Power and Transmission consists of its investments in renewable energy assets and transmission facilities. Renewable energy assets consist of wind, solar, geothermal and waste heat recovery facilities in Canada. Energy Services undertake physical commodity marketing activity and logistical services, and oversee refinery supply services.

About Noble Midstream Partners

Noble Midstream Partners LP is engaged in owning, operating, developing and acquiring a range of domestic midstream infrastructure assets. The Company’s areas of focus are in the area of Denver-Julesburg (DJ) Basin in Colorado and the Southern Delaware Basin position of the Permian Basin in Texas (Delaware Basin). Its segments include Gathering Systems, Fresh Water Delivery, and Investments in White Cliffs and Other. The Gathering Systems segment includes crude oil, natural gas and produced water gathering, as well as crude oil treating. It holds interest in White Cliffs Pipeline L.L.C. (the White Cliffs Interest). The Investments in White Cliffs and Other segment includes activity associated with the White Cliffs Interest. As of December 31, 2016, the White Cliffs Pipeline system consisted of two 527-mile crude oil pipelines that extended from the DJ Basin to the Cushing, Oklahoma. It provides crude oil, natural gas, and water-related midstream services for Noble Energy, Inc.

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