Magellan Midstream Partners (NYSE:MMP) and Phillips 66 Partners (NYSE:PSXP) are both oils/energy companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, analyst recommendations, valuation, profitability, earnings and risk.
Valuation & Earnings
This table compares Magellan Midstream Partners and Phillips 66 Partners’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Magellan Midstream Partners||$2.51 billion||5.71||$869.53 million||$3.81||16.48|
|Phillips 66 Partners||$1.17 billion||5.20||$461.00 million||$2.59||18.95|
Risk & Volatility
Magellan Midstream Partners has a beta of 0.82, indicating that its share price is 18% less volatile than the S&P 500. Comparatively, Phillips 66 Partners has a beta of 1.26, indicating that its share price is 26% more volatile than the S&P 500.
This is a summary of current ratings and price targets for Magellan Midstream Partners and Phillips 66 Partners, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Magellan Midstream Partners||2||10||5||0||2.18|
|Phillips 66 Partners||1||4||7||0||2.50|
Magellan Midstream Partners currently has a consensus target price of $74.33, suggesting a potential upside of 18.42%. Phillips 66 Partners has a consensus target price of $58.29, suggesting a potential upside of 18.74%. Given Phillips 66 Partners’ stronger consensus rating and higher probable upside, analysts clearly believe Phillips 66 Partners is more favorable than Magellan Midstream Partners.
This table compares Magellan Midstream Partners and Phillips 66 Partners’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Magellan Midstream Partners||47.75%||43.31%||12.99%|
|Phillips 66 Partners||51.76%||47.66%||13.48%|
Magellan Midstream Partners pays an annual dividend of $3.91 per share and has a dividend yield of 6.2%. Phillips 66 Partners pays an annual dividend of $3.17 per share and has a dividend yield of 6.5%. Magellan Midstream Partners pays out 102.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Phillips 66 Partners pays out 122.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Magellan Midstream Partners has increased its dividend for 8 consecutive years and Phillips 66 Partners has increased its dividend for 4 consecutive years.
Insider and Institutional Ownership
63.2% of Magellan Midstream Partners shares are held by institutional investors. Comparatively, 41.8% of Phillips 66 Partners shares are held by institutional investors. 0.3% of Magellan Midstream Partners shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Phillips 66 Partners beats Magellan Midstream Partners on 9 of the 17 factors compared between the two stocks.
Magellan Midstream Partners Company Profile
Magellan Midstream Partners, L.P. engages in the transportation, storage, and distribution of refined petroleum products and crude oil in the United States. The company operates through Refined Products, Crude Oil, and Marine Storage segments. It operates refined products pipeline that transports gasoline, distillates, aviation fuels, and liquefied petroleum gases for independent refiners and integrated oil companies, wholesalers, retailers, traders, railroads, airlines, bio-fuel producers, and regional farm cooperatives; and provides services, including terminalling, ethanol and biodiesel unloading and loading, additive injection, custom blending, laboratory testing, and data services to shippers. The company also owns and operates crude oil pipelines and storage facilities; and marine terminals located along coastal waterways that provide distribution, storage, blending, inventory management, and additive injection services for refiners, marketers, traders, and other end users of petroleum products. As of December 31, 2017, it had 9,700-mile refined products pipeline system with 53 terminals, as well as 26 independent terminals; 1,100-mile ammonia pipeline system; approximately 2,200 miles of crude oil pipelines and storage facilities with an aggregate storage capacity of approximately 28 million barrels; and 5 marine terminals with an aggregate storage capacity of approximately 26 million barrels. The company serves as the general partner of Magellan GP, LLC. Magellan Midstream Partners, L.P. was founded in 2000 and is headquartered in Tulsa, Oklahoma.
Phillips 66 Partners Company Profile
Phillips 66 Partners LP owns, operates, develops, and acquires crude oil, refined petroleum products, and natural gas liquids pipelines, terminals, and other transportation and midstream assets. The company operates pipeline assets in Lake Charles, Sweeny, Wood River, Borger/Ponca City, Billings, and Borger; terminal, rail rack, and storage assets in Louisiana, Texas, Illinois, Missouri, Kansas, Oklahoma, New Jersey, Washington, Wyoming, and Montana; marine assets in Lake Charles and Wood River; and natural gas liquids assets in Texas and Louisiana. Phillips 66 Partners GP LLC operates as the general partner of Phillips 66 Partners LP. The company was founded in 2013 and is headquartered in Houston, Texas. Phillips 66 Partners LP is a subsidiary of Phillips 66 Project Development Inc.
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