Analyzing Kinetik (NASDAQ:KNTK) & Energy Transfer (NYSE:ET)

Kinetik (NASDAQ:KNTKGet Rating) and Energy Transfer (NYSE:ETGet Rating) are both oils/energy companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, analyst recommendations, valuation, profitability, institutional ownership, risk and earnings.

Volatility & Risk

Kinetik has a beta of 2.97, suggesting that its share price is 197% more volatile than the S&P 500. Comparatively, Energy Transfer has a beta of 1.93, suggesting that its share price is 93% more volatile than the S&P 500.

Dividends

Kinetik pays an annual dividend of $6.00 per share and has a dividend yield of 6.9%. Energy Transfer pays an annual dividend of $0.80 per share and has a dividend yield of 6.5%. Energy Transfer pays out 75.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Energy Transfer has raised its dividend for 1 consecutive years.

Profitability

This table compares Kinetik and Energy Transfer’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Kinetik 69.18% -9.77% 2.31%
Energy Transfer 4.58% 10.25% 3.19%

Insider and Institutional Ownership

11.5% of Kinetik shares are owned by institutional investors. Comparatively, 48.4% of Energy Transfer shares are owned by institutional investors. 3.5% of Kinetik shares are owned by company insiders. Comparatively, 3.3% of Energy Transfer shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings for Kinetik and Energy Transfer, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kinetik 0 0 3 0 3.00
Energy Transfer 0 0 8 1 3.11

Kinetik presently has a consensus target price of $79.33, indicating a potential downside of 8.98%. Energy Transfer has a consensus target price of $14.11, indicating a potential upside of 15.10%. Given Energy Transfer’s stronger consensus rating and higher probable upside, analysts clearly believe Energy Transfer is more favorable than Kinetik.

Earnings & Valuation

This table compares Kinetik and Energy Transfer’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Kinetik $160.62 million 35.95 $99.22 million N/A N/A
Energy Transfer $67.42 billion 0.56 $5.18 billion $1.06 11.57

Energy Transfer has higher revenue and earnings than Kinetik.

Summary

Energy Transfer beats Kinetik on 10 of the 17 factors compared between the two stocks.

About Kinetik (Get Rating)

Kinetik Holdings Inc. operates as a midstream company in the Texas Delaware Basin. It provides gathering, transportation, compression, processing, and treating services for companies that produce natural gas, natural gas liquids, crude oil, and water. The company is headquartered in Midland, Texas.

About Energy Transfer (Get Rating)

Energy Transfer LP provides energy-related services. The company owns and operates approximately 11,600 miles of natural gas transportation pipeline, and three natural gas storage facilities in Texas and two natural gas storage facilities located in the state of Texas and Oklahoma; and 19,830 miles of interstate natural gas pipeline. It also sells natural gas to electric utilities, independent power plants, local distribution and other marketing companies, and industrial end-users. The company owns and operates natural gas gathering and natural gas liquid (NGL) pipeline, processing plant, and treating and conditioning facilities in Texas, New Mexico, West Virginia, Pennsylvania, Ohio, Oklahoma, Arkansas, Kansas, and Louisiana; natural gas gathering, oil pipeline, and oil stabilization facilities in South Texas; and a natural gas gathering system in Ohio, as well as transport and supplies water to natural gas producer in Pennsylvania. It owns approximately 5,215 miles of NGL pipeline; NGL and propane fractionation facilities; NGL storage facilities with working storage capacity of approximately 50 million barrels (MMBbls); and other NGL storage assets and terminal with an aggregate storage capacity of approximately 17 MMBbls. The company provides crude oil transportation, terminalling, acquisition, and marketing activities; and sells and distributes gasoline, middle distillate, and motor fuels and other petroleum product. It offers natural gas compression service; carbon dioxide and hydrogen sulfide removal, natural gas cooling, dehydration, and British thermal unit management service; and manages coal and natural resources properties, as well as sells standing timber, leases coal-related infrastructure facilities, collects oil and gas royalty, and generate electrical power. The company was formerly known as Energy Transfer Equity, L.P. and changed its name to Energy Transfer LP in October 2018. The company was founded in 1996 and is headquartered in Dallas, Texas.

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