Energy Transfer (NYSE:ET) and NGL Energy Partners (NYSE:NGL) Critical Survey

Energy Transfer (NYSE:ETGet Rating) and NGL Energy Partners (NYSE:NGLGet Rating) are both oils/energy companies, but which is the better investment? We will compare the two businesses based on the strength of their valuation, risk, analyst recommendations, profitability, institutional ownership, dividends and earnings.

Profitability

This table compares Energy Transfer and NGL Energy Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Energy Transfer 7.82% 16.03% 5.15%
NGL Energy Partners -6.04% -28.00% -2.13%

Institutional and Insider Ownership

39.6% of Energy Transfer shares are owned by institutional investors. Comparatively, 28.7% of NGL Energy Partners shares are owned by institutional investors. 3.3% of Energy Transfer shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility and Risk

Energy Transfer has a beta of 2.08, meaning that its share price is 108% more volatile than the S&P 500. Comparatively, NGL Energy Partners has a beta of 2.36, meaning that its share price is 136% more volatile than the S&P 500.

Valuation and Earnings

This table compares Energy Transfer and NGL Energy Partners’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Energy Transfer $67.42 billion 0.54 $5.18 billion $1.90 6.07
NGL Energy Partners $5.23 billion 0.05 -$639.82 million ($3.75) -0.58

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

Analyst Recommendations

This is a summary of current ratings for Energy Transfer and NGL Energy Partners, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Energy Transfer 0 0 10 1 3.09
NGL Energy Partners 1 0 0 0 1.00

Energy Transfer presently has a consensus target price of $13.73, suggesting a potential upside of 19.06%. NGL Energy Partners has a consensus target price of $2.25, suggesting a potential upside of 2.74%. Given Energy Transfer’s stronger consensus rating and higher possible upside, analysts clearly believe Energy Transfer is more favorable than NGL Energy Partners.

Summary

Energy Transfer beats NGL Energy Partners on 14 of the 15 factors compared between the two stocks.

Energy Transfer Company Profile (Get Rating)

Energy Transfer LP provides energy-related services. The company owns and operates approximately 11,600 miles of natural gas transportation pipeline, and three natural gas storage facilities in Texas and two natural gas storage facilities located in the state of Texas and Oklahoma; and 19,830 miles of interstate natural gas pipeline. It also sells natural gas to electric utilities, independent power plants, local distribution and other marketing companies, and industrial end-users. The company owns and operates natural gas gathering and natural gas liquid (NGL) pipeline, processing plant, and treating and conditioning facilities in Texas, New Mexico, West Virginia, Pennsylvania, Ohio, Oklahoma, Arkansas, Kansas, and Louisiana; natural gas gathering, oil pipeline, and oil stabilization facilities in South Texas; and a natural gas gathering system in Ohio, as well as transport and supplies water to natural gas producer in Pennsylvania. It owns approximately 5,215 miles of NGL pipeline; NGL and propane fractionation facilities; NGL storage facilities with working storage capacity of approximately 50 million barrels (MMBbls); and other NGL storage assets and terminal with an aggregate storage capacity of approximately 17 MMBbls. The company provides crude oil transportation, terminalling, acquisition, and marketing activities; and sells and distributes gasoline, middle distillate, and motor fuels and other petroleum product. It offers natural gas compression service; carbon dioxide and hydrogen sulfide removal, natural gas cooling, dehydration, and British thermal unit management service; and manages coal and natural resources properties, as well as sells standing timber, leases coal-related infrastructure facilities, collects oil and gas royalty, and generate electrical power. The company was formerly known as Energy Transfer Equity, L.P. and changed its name to Energy Transfer LP in October 2018. The company was founded in 1996 and is headquartered in Dallas, Texas.

NGL Energy Partners Company Profile (Get Rating)

NGL Energy Partners LP engages in the crude oil and liquids logistics, and water solution businesses. The company's Crude Oil Logistics segment purchases crude oil from producers and marketers, and transports it to refineries for resale at pipeline injection stations, storage terminals, barge loading facilities, rail facilities, refineries, and other trade hubs; and provides storage, terminaling, and pipeline transportation services. Its Water Solutions segment transports, treats, recycles, and disposes produced and flowback water generated from oil and natural gas production; disposes solids, such as tank bottoms, and drilling fluid and muds, as well as performs truck and frac tank washouts; and sells produced water for reuse and brackish non-potable water. The company's Liquids Logistics segment supplies natural gas liquids, refined petroleum products, and biodiesel to commercial, retail, and industrial customers in the United States and Canada through its 28 terminals, third-party storage and terminal facilities, and common carrier pipelines, as well as through fleet of leased railcars. This segment is also involved in the marine export of butane through its facility located in Chesapeake, Virginia; and offers terminaling and storage services. NGL Energy Holdings LLC serves as the general partner of the company. The company was founded in 1940 and is headquartered in Tulsa, Oklahoma.

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