Helmerich & Payne (NYSE:HP) and Magellan Midstream Partners (NYSE:MMP) are both mid-cap oils/energy companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, risk, earnings, institutional ownership, profitability, dividends and analyst recommendations.
Dividends
Helmerich & Payne pays an annual dividend of $1.00 per share and has a dividend yield of 3.7%. Magellan Midstream Partners pays an annual dividend of $4.11 per share and has a dividend yield of 9.9%. Helmerich & Payne pays out -116.3% of its earnings in the form of a dividend. Magellan Midstream Partners pays out 86.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Helmerich & Payne has increased its dividend for 1 consecutive years and Magellan Midstream Partners has increased its dividend for 1 consecutive years.
Risk & Volatility
Helmerich & Payne has a beta of 2.25, meaning that its share price is 125% more volatile than the S&P 500. Comparatively, Magellan Midstream Partners has a beta of 1.08, meaning that its share price is 8% more volatile than the S&P 500.
Institutional and Insider Ownership
88.1% of Helmerich & Payne shares are held by institutional investors. Comparatively, 62.0% of Magellan Midstream Partners shares are held by institutional investors. 4.5% of Helmerich & Payne shares are held by insiders. Comparatively, 0.3% of Magellan Midstream Partners shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Analyst Recommendations
This is a breakdown of recent ratings and target prices for Helmerich & Payne and Magellan Midstream Partners, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
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Helmerich & Payne | 6 | 8 | 9 | 0 | 2.13 |
Magellan Midstream Partners | 1 | 8 | 13 | 0 | 2.55 |
Helmerich & Payne currently has a consensus target price of $21.6842, indicating a potential downside of 20.57%. Magellan Midstream Partners has a consensus target price of $50.0526, indicating a potential upside of 20.06%. Given Magellan Midstream Partners' stronger consensus rating and higher possible upside, analysts clearly believe Magellan Midstream Partners is more favorable than Helmerich & Payne.
Profitability
This table compares Helmerich & Payne and Magellan Midstream Partners' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
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Helmerich & Payne | -27.88% | -2.80% | -1.90% |
Magellan Midstream Partners | 35.61% | 37.91% | 11.65% |
Valuation & Earnings
This table compares Helmerich & Payne and Magellan Midstream Partners' revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
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Helmerich & Payne | $1.77 billion | 1.66 | $-494,500,000.00 | ($0.86) | -31.74 |
Magellan Midstream Partners | $2.73 billion | 3.41 | $1.02 billion | $4.76 | 8.76 |
Magellan Midstream Partners has higher revenue and earnings than Helmerich & Payne. Helmerich & Payne is trading at a lower price-to-earnings ratio than Magellan Midstream Partners, indicating that it is currently the more affordable of the two stocks.
Summary
Magellan Midstream Partners beats Helmerich & Payne on 12 of the 16 factors compared between the two stocks.