Enbridge (NYSE:ENB – Get Free Report) and Kinder Morgan (NYSE:KMI – Get Free Report) are both large-cap energy companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, analyst recommendations, risk, earnings and profitability.
Dividends
Enbridge pays an annual dividend of $2.71 per share and has a dividend yield of 6.1%. Kinder Morgan pays an annual dividend of $1.17 per share and has a dividend yield of 4.3%. Enbridge pays out 139.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Kinder Morgan pays out 95.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Enbridge has increased its dividend for 2 consecutive years and Kinder Morgan has increased its dividend for 1 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 ratings for Enbridge and Kinder Morgan, as reported by MarketBeat.com.
Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
Enbridge | 0 | 5 | 4 | 0 | 2.44 |
Kinder Morgan | 0 | 7 | 8 | 0 | 2.53 |
Institutional & Insider Ownership
54.6% of Enbridge shares are owned by institutional investors. Comparatively, 62.5% of Kinder Morgan shares are owned by institutional investors. 0.4% of Enbridge shares are owned by insiders. Comparatively, 12.7% of Kinder Morgan shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Volatility and Risk
Enbridge has a beta of 0.79, meaning that its stock price is 21% less volatile than the S&P 500. Comparatively, Kinder Morgan has a beta of 0.75, meaning that its stock price is 25% less volatile than the S&P 500.
Valuation & Earnings
This table compares Enbridge and Kinder Morgan”s top-line revenue, earnings per share (EPS) and valuation.
Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
Enbridge | $60.94 billion | 1.60 | $3.97 billion | $1.94 | 23.09 |
Kinder Morgan | $15.10 billion | 4.01 | $2.61 billion | $1.22 | 22.35 |
Enbridge has higher revenue and earnings than Kinder Morgan. Kinder Morgan is trading at a lower price-to-earnings ratio than Enbridge, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Enbridge and Kinder Morgan’s net margins, return on equity and return on assets.
Net Margins | Return on Equity | Return on Assets | |
Enbridge | 10.16% | 10.41% | 3.10% |
Kinder Morgan | 17.06% | 8.31% | 3.69% |
Summary
Enbridge beats Kinder Morgan on 9 of the 17 factors compared between the two stocks.
About Enbridge
Enbridge Inc., together with its subsidiaries, operates as an energy infrastructure company. The company operates through five segments: Liquids Pipelines, Gas Transmission and Midstream, Gas Distribution and Storage, Renewable Power Generation, and Energy Services. The Liquids Pipelines segment operates pipelines and related terminals to transport various grades of crude oil and other liquid hydrocarbons in Canada and the United States. The Gas Transmission and Midstream segment invests in natural gas pipelines and gathering and processing facilities in Canada and the United States. The Gas Distribution and Storage segment is involved in natural gas utility operations serving residential, commercial, and industrial customers in Ontario, as well as natural gas distribution activities in Quebec. The Renewable Power Generation segment operates power generating assets, such as wind, solar, geothermal, waste heat recovery, and transmission assets in North America. The Energy Services segment provides physical commodity marketing and logistical services to refiners, producers, and other customers in Canada and the United States. The company was formerly known as IPL Energy Inc. and changed its name to Enbridge Inc. in October 1998. Enbridge Inc. was founded in 1949 and is headquartered in Calgary, Canada.
About Kinder Morgan
Kinder Morgan, Inc. operates as an energy infrastructure company primarily in North America. The company operates through Natural Gas Pipelines, Products Pipelines, Terminals, and CO2 segments. The Natural Gas Pipelines segment owns and operates interstate and intrastate natural gas pipeline, and storage systems; natural gas gathering systems and natural gas processing and treating facilities; natural gas liquids fractionation facilities and transportation systems; and liquefied natural gas gasification, liquefaction, and storage facilities. The Products Pipelines segment owns and operates refined petroleum products, and crude oil and condensate pipelines; and associated product terminals and petroleum pipeline transmix facilities. The Terminals segment owns and/or operates liquids and bulk terminals that stores and handles various commodities, including gasoline, diesel fuel, renewable fuel and feedstocks, chemicals, ethanol, metals, and petroleum coke; and owns tankers. The CO2 segment produces, transports, and markets CO2 to recovery and production crude oil from mature oil fields; owns interests in/or operates oil fields and gasoline processing plants; and operates a crude oil pipeline system in West Texas, as well as owns and operates RNG and LNG facilities. It owns and operates approximately 82,000 miles of pipelines and 139 terminals. The company was formerly known as Kinder Morgan Holdco LLC and changed its name to Kinder Morgan, Inc. in February 2011. Kinder Morgan, Inc. was incorporated in 2006 and is headquartered in Houston, Texas.
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