Reviewing Mplx (NYSE:MPLX) and Ultrapar Participacoes (NYSE:UGP)

Ultrapar Participacoes (NYSE:UGP) and Mplx (NYSE:MPLX) are both energy companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, analyst recommendations, valuation, institutional ownership, risk, earnings and dividends.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Ultrapar Participacoes and Mplx, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ultrapar Participacoes	0	1	3	1	3.00
Mplx	1	1	6	0	2.63

Ultrapar Participacoes presently has a consensus target price of $3.20, suggesting a potential upside of 6.84%. Mplx has a consensus target price of $55.63, suggesting a potential upside of 10.27%. Given Mplx’s higher probable upside, analysts clearly believe Mplx is more favorable than Ultrapar Participacoes.

Dividends

Ultrapar Participacoes pays an annual dividend of $0.14 per share and has a dividend yield of 4.7%. Mplx pays an annual dividend of $3.83 per share and has a dividend yield of 7.6%. Ultrapar Participacoes pays out 38.9% of its earnings in the form of a dividend. Mplx pays out 88.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Mplx has increased its dividend for 9 consecutive years. Mplx is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

Ultrapar Participacoes has a beta of 1.06, suggesting that its stock price is 6% more volatile than the S&P 500. Comparatively, Mplx has a beta of 0.73, suggesting that its stock price is 27% less volatile than the S&P 500.

Insider & Institutional Ownership

3.6% of Ultrapar Participacoes shares are held by institutional investors. Comparatively, 24.3% of Mplx shares are held by institutional investors. 1.8% of Ultrapar Participacoes shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Ultrapar Participacoes and Mplx’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ultrapar Participacoes	1.65%	14.29%	5.70%
Mplx	36.34%	32.08%	11.57%

Valuation & Earnings

This table compares Ultrapar Participacoes and Mplx”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ultrapar Participacoes	$24.76 billion	0.13	$438.05 million	$0.36	8.32
Mplx	$11.93 billion	4.32	$4.32 billion	$4.33	11.65

Mplx has lower revenue, but higher earnings than Ultrapar Participacoes. Ultrapar Participacoes is trading at a lower price-to-earnings ratio than Mplx, indicating that it is currently the more affordable of the two stocks.

Summary

Mplx beats Ultrapar Participacoes on 12 of the 18 factors compared between the two stocks.

About Ultrapar Participacoes

Ultrapar Participações S.A., through its subsidiaries, operates in the energy and infrastructure business in Brazil. The company distributes liquefied petroleum gas to residential, commercial, and industrial consumers, in addition to renewable electricity and compressed natural gas. It also operates in the distribution and marketing of gasoline, ethanol, diesel, fuel oil, kerosene, natural gas for vehicles, and lubricants; and holds AmPm convenience stores and provides JetOil lubricant services. In addition, the company operates liquid bulk storage terminals. Further, it offers digital payments services, combining the abastece aí app and the loyalty program Km de Vantagens. It also exports its products and services to customers in Europe, Singapore, the United States, Canada, other Latin American countries, and internationally. The company was founded in 1937 and is headquartered in São Paulo, Brazil.

About Mplx

MPLX LP engages in the operation of midstream energy infrastructure and logistics assets, and distribution fuels services. It operates through the Crude Oil and Products Logistics and Natural Gas and NGL Services segments. The Crude Oil and Products Logistics segment transports, stores, distributes, and markets crude oil, asphalt, refined petroleum products, and water. The Natural Gas and NGL Services segment gathers, processes, and transports natural gas, and gathers, transports, fractionates, stores, and markets natural gas liquids (NGLs). The company was founded on March 27, 2012 and is headquartered in Findlay, OH.