Critical Comparison: DCP Midstream Partners (DCP) and BP Midstream Partners (BPMP)

DCP Midstream Partners (NYSE: DCP) and BP Midstream Partners (NYSE:BPMP) are both oils/energy companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, dividends, institutional ownership, profitability, earnings, analyst recommendations and risk.

Dividends

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DCP Midstream Partners pays an annual dividend of $3.12 per share and has a dividend yield of 8.8%. BP Midstream Partners pays an annual dividend of $0.72 per share and has a dividend yield of 4.0%. DCP Midstream Partners pays out 588.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. BP Midstream Partners pays out 342.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Earnings and Valuation

This table compares DCP Midstream Partners and BP Midstream Partners’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
DCP Midstream Partners $8.46 billion 0.60 $229.00 million $0.53 67.02
BP Midstream Partners $108.15 million 17.63 $60.87 million $0.21 86.67

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

Profitability

This table compares DCP Midstream Partners and BP Midstream Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
DCP Midstream Partners 2.71% 3.59% 1.86%
BP Midstream Partners N/A N/A N/A

Analyst Recommendations

This is a summary of recent recommendations for DCP Midstream Partners and BP Midstream Partners, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
DCP Midstream Partners 1 5 4 0 2.30
BP Midstream Partners 0 6 2 0 2.25

DCP Midstream Partners presently has a consensus price target of $39.11, indicating a potential upside of 10.11%. BP Midstream Partners has a consensus price target of $20.43, indicating a potential upside of 12.24%. Given BP Midstream Partners’ higher probable upside, analysts plainly believe BP Midstream Partners is more favorable than DCP Midstream Partners.

Insider and Institutional Ownership

56.6% of DCP Midstream Partners shares are held by institutional investors. Comparatively, 49.7% of BP Midstream Partners shares are held by institutional investors. 0.0% of DCP Midstream Partners shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

DCP Midstream Partners beats BP Midstream Partners on 11 of the 15 factors compared between the two stocks.

DCP Midstream Partners Company Profile

DCP Midstream, LP, together with its subsidiaries, owns, operates, acquires, and develops a portfolio of midstream energy assets in the United States. The company operates in two segments, Gathering and Processing, and Logistics and Marketing. The Gathering and Processing segment is involved in gathering, compressing, treating, and processing natural gas; producing and fractionating natural gas liquids (NGLs); and recovering condensate. The Logistics and Marketing segment engages in transporting, trading, marketing, and storing natural gas and NGLs; fractionating NGLs; and wholesale propane logistics. As of February 13, 2018, it owned and operated approximately 60 plants and 63,000 miles of natural gas and NGLs pipelines with operations in 17 states. The company serves petrochemical and refining companies, and retail propane distributors. DCP Midstream GP, LP serves as the general partner of the company. The company was formerly known as DCP Midstream Partners, LP and changed its name to DCP Midstream, LP in January 2017. DCP Midstream, LP was founded in 2005 and is headquartered in Denver, Colorado.

BP Midstream Partners Company Profile

BP Midstream Partners LP is a master limited partnership formed by BP Pipelines (North America) Inc. The Company owns, operates, develops and acquires pipelines and other midstream assets. It owns one onshore crude oil pipeline system, one onshore refined products pipeline system, one onshore diluent pipeline system, interests in four offshore crude oil pipeline systems and an interest in one offshore natural gas pipeline system. Its onshore crude oil, refined products and diluent pipelines include BP2 Pipeline, River Rouge Pipeline and Diamondback Pipeline. Its offshore crude oil and natural gas pipelines include Mars System, Caesar Pipeline, Cleopatra Pipeline, Proteus Pipeline and Endymion Pipeline.

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