Head to Head Review: Shell Midstream Partners, L.P. (SHLX) and The Competition

Shell Midstream Partners, L.P. (NYSE: SHLX) is one of 54 publicly-traded companies in the “Oil & Gas Transportation Services” industry, but how does it compare to its rivals? We will compare Shell Midstream Partners, L.P. to similar companies based on the strength of its analyst recommendations, institutional ownership, risk, earnings, valuation, dividends and profitability.

Dividends

Shell Midstream Partners, L.P. pays an annual dividend of $1.27 per share and has a dividend yield of 5.0%. Shell Midstream Partners, L.P. pays out 102.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Oil & Gas Transportation Services” companies pay a dividend yield of 6.6% and pay out 166.3% of their earnings in the form of a dividend.

Institutional & Insider Ownership

43.7% of Shell Midstream Partners, L.P. shares are held by institutional investors. Comparatively, 57.3% of shares of all “Oil & Gas Transportation Services” companies are held by institutional investors. 9.2% of shares of all “Oil & Gas Transportation Services” companies are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Shell Midstream Partners, L.P. and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Shell Midstream Partners, L.P. 87.22% 258.67% 28.64%
Shell Midstream Partners, L.P. Competitors 17.51% 10.65% 6.23%

Valuation & Earnings

This table compares Shell Midstream Partners, L.P. and its rivals gross revenue, earnings per share (EPS) and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Shell Midstream Partners, L.P. $283.50 million $160.60 million 20.49
Shell Midstream Partners, L.P. Competitors $5.65 billion $1.31 billion 46.42

Shell Midstream Partners, L.P.’s rivals have higher revenue and earnings than Shell Midstream Partners, L.P.. Shell Midstream Partners, L.P. is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Analyst Ratings

This is a breakdown of recent recommendations for Shell Midstream Partners, L.P. and its rivals, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Shell Midstream Partners, L.P. 0 1 4 0 2.80
Shell Midstream Partners, L.P. Competitors 293 1781 2380 86 2.50

Shell Midstream Partners, L.P. currently has a consensus price target of $34.80, indicating a potential upside of 36.95%. As a group, “Oil & Gas Transportation Services” companies have a potential upside of 23.78%. Given Shell Midstream Partners, L.P.’s stronger consensus rating and higher possible upside, research analysts plainly believe Shell Midstream Partners, L.P. is more favorable than its rivals.

Volatility and Risk

Shell Midstream Partners, L.P. has a beta of 1.17, suggesting that its stock price is 17% more volatile than the S&P 500. Comparatively, Shell Midstream Partners, L.P.’s rivals have a beta of 1.38, suggesting that their average stock price is 38% more volatile than the S&P 500.

Summary

Shell Midstream Partners, L.P. rivals beat Shell Midstream Partners, L.P. on 8 of the 15 factors compared.

About Shell Midstream Partners, L.P.

Shell Midstream Partners, L.P. is a master limited partnership company, which owns, operates, develops and acquires pipelines and other midstream assets. The Company conducts its operations through its subsidiary, Shell Midstream Operating, LLC. Its assets consist of interests in entities that own crude oil and refined products pipelines serving as key infrastructure to transport onshore and offshore crude oil production to Gulf Coast and Midwest refining markets and to deliver refined products from those markets to demand centers. As of December 31, 2016, it owned interests in seven crude oil pipeline systems, three refined products systems, one natural gas gathering pipeline system and a crude tank storage and terminal system. Its pipeline and terminal systems include Zydeco crude oil system, Auger crude oil system, Mars crude oil system, Bengal product system, Poseidon crude oil system, Odyssey crude oil system, Proteus crude oil system and Endymion crude oil system.

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