Head to Head Analysis: Kinder Morgan (NYSE:KMI) and Ultrapar Participacoes (NYSE:UGP)

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

Analyst Ratings

This is a breakdown of recent ratings for Kinder Morgan and Ultrapar Participacoes, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kinder Morgan	0	7	9	0	2.56
Ultrapar Participacoes	0	0	3	2	3.40

Kinder Morgan presently has a consensus price target of $31.20, suggesting a potential upside of 15.64%. Ultrapar Participacoes has a consensus price target of $3.20, suggesting a potential downside of 12.45%. Given Kinder Morgan’s higher possible upside, analysts clearly believe Kinder Morgan is more favorable than Ultrapar Participacoes.

Volatility & Risk

Kinder Morgan has a beta of 0.78, meaning that its share price is 22% less volatile than the S&P 500. Comparatively, Ultrapar Participacoes has a beta of 1.05, meaning that its share price is 5% more volatile than the S&P 500.

Institutional and Insider Ownership

62.5% of Kinder Morgan shares are owned by institutional investors. Comparatively, 3.6% of Ultrapar Participacoes shares are owned by institutional investors. 12.7% of Kinder Morgan shares are owned by insiders. Comparatively, 1.8% of Ultrapar Participacoes shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

Kinder Morgan pays an annual dividend of $1.17 per share and has a dividend yield of 4.3%. Ultrapar Participacoes pays an annual dividend of $0.10 per share and has a dividend yield of 2.7%. 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. Ultrapar Participacoes pays out 22.2% of its earnings in the form of a dividend. Kinder Morgan has raised its dividend for 1 consecutive years. Kinder Morgan is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Kinder Morgan and Ultrapar Participacoes’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Kinder Morgan	17.06%	8.31%	3.69%
Ultrapar Participacoes	2.12%	17.64%	7.11%

Valuation & Earnings

This table compares Kinder Morgan and Ultrapar Participacoes”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kinder Morgan	$15.97 billion	3.75	$2.61 billion	$1.22	22.12
Ultrapar Participacoes	$24.76 billion	0.16	$438.05 million	$0.45	8.12

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

Summary

Kinder Morgan beats Ultrapar Participacoes on 11 of the 18 factors compared between the two stocks.

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.

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.