Contrasting Star Group (NYSE:SGU) and Enbridge (NYSE:ENB)

Enbridge (NYSE:ENB) and Star Group (NYSE:SGU) are both energy companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, risk, earnings, institutional ownership, analyst recommendations, valuation and profitability.

Insider and Institutional Ownership

54.6% of Enbridge shares are owned by institutional investors. Comparatively, 40.4% of Star Group shares are owned by institutional investors. 0.4% of Enbridge shares are owned by insiders. Comparatively, 20.4% of Star Group shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Volatility & Risk

Enbridge has a beta of 0.57, indicating that its stock price is 43% less volatile than the S&P 500. Comparatively, Star Group has a beta of 0.34, indicating that its stock price is 66% less volatile than the S&P 500.

Profitability

This table compares Enbridge and Star Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Enbridge	7.20%	11.17%	3.02%
Star Group	4.57%	24.43%	8.39%

Earnings & Valuation

This table compares Enbridge and Star Group”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Enbridge	$46.66 billion	2.22	$5.36 billion	$1.87	24.88
Star Group	$1.78 billion	0.24	$73.50 million	$1.87	6.89

Enbridge has higher revenue and earnings than Star Group. Star Group is trading at a lower price-to-earnings ratio than Enbridge, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current ratings and price targets for Enbridge and Star Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Enbridge	0	4	8	1	2.77
Star Group	0	1	0	0	2.00

Enbridge presently has a consensus target price of $65.88, indicating a potential upside of 41.57%. Given Enbridge’s stronger consensus rating and higher probable upside, research analysts plainly believe Enbridge is more favorable than Star Group.

Dividends

Enbridge pays an annual dividend of $2.75 per share and has a dividend yield of 5.9%. Star Group pays an annual dividend of $0.79 per share and has a dividend yield of 6.1%. Enbridge pays out 147.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Star Group pays out 42.2% of its earnings in the form of a dividend. Enbridge has increased its dividend for 2 consecutive years and Star Group has increased its dividend for 13 consecutive years. Star Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Enbridge beats Star Group on 11 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 Star Group

Star Group, L.P., together with its subsidiaries, provides home heating oil and propane products and services to residential and commercial customers in the United States. It offers gasoline and diesel fuel; and installs, maintain, and repairs heating and air conditioning equipment. As of September 30, 2023, the company served approximately 402,200 full service residential and commercial home heating oil and propane customers and 52,400 customers on a delivery only basis. It also sells gasoline and diesel fuel to approximately 26,600 customers. The company was formerly known as Star Gas Partners, L.P. and changed its name to Star Group, L.P. in October 2017. Star Group, L.P. was incorporated in 1995 and is based in Stamford, Connecticut.