Contrasting Shell Midstream Partners (SHLX) and Andeavor Logistics (NYSE:ANDX)

Andeavor Logistics (NYSE: ANDX) and Shell Midstream Partners (NYSE:SHLX) are both mid-cap oils/energy companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, risk, valuation, profitability, dividends and earnings.

Earnings & Valuation

This table compares Andeavor Logistics and Shell Midstream Partners’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Andeavor Logistics $3.21 billion 3.09 $373.00 million $2.51 18.21
Shell Midstream Partners $470.10 million 9.71 $372.60 million $1.28 15.94

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

Dividends

Andeavor Logistics pays an annual dividend of $4.00 per share and has a dividend yield of 8.8%. Shell Midstream Partners pays an annual dividend of $1.33 per share and has a dividend yield of 6.5%. Andeavor Logistics pays out 159.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Shell Midstream Partners pays out 103.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Shell Midstream Partners has increased its dividend for 2 consecutive years.

Profitability

This table compares Andeavor Logistics and Shell Midstream Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Andeavor Logistics 14.67% 19.31% 6.20%
Shell Midstream Partners 78.08% -179.87% 26.36%

Risk and Volatility

Andeavor Logistics has a beta of 1.25, meaning that its share price is 25% more volatile than the S&P 500. Comparatively, Shell Midstream Partners has a beta of 1.23, meaning that its share price is 23% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Andeavor Logistics and Shell Midstream Partners, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Andeavor Logistics 0 3 10 0 2.77
Shell Midstream Partners 0 3 4 0 2.57

Andeavor Logistics presently has a consensus price target of $54.18, indicating a potential upside of 18.56%. Shell Midstream Partners has a consensus price target of $29.50, indicating a potential upside of 44.61%. Given Shell Midstream Partners’ higher possible upside, analysts clearly believe Shell Midstream Partners is more favorable than Andeavor Logistics.

Institutional & Insider Ownership

40.1% of Andeavor Logistics shares are held by institutional investors. Comparatively, 44.9% of Shell Midstream Partners shares are held by institutional investors. 0.2% of Andeavor Logistics shares are held 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.

Summary

Andeavor Logistics beats Shell Midstream Partners on 10 of the 17 factors compared between the two stocks.

About Andeavor Logistics

Andeavor Logistics LP operates as a diversified midstream company in the United States. The Terminalling and Transportation segment comprises the Northwest Products Pipeline, including a regulated common carrier products pipeline running from Salt Lake City, Utah to Spokane, Washington and a jet fuel pipeline to the Salt Lake City International Airport; a regulated common carrier refined products pipeline system connecting its refinery to its terminals in Anchorage, Alaska; tankage and related equipment at the refinery; and crude oil and refined products terminals and storage facilities in the western, and southwest and midwestern U.S. This segment also consists of marine terminals in California and Washington; a rail-car unloading and petroleum coke handling facilities; marine terminals; a manifest rail facility; an asphalt trucking operation; a petroleum coke handling and storage facility; asphalt terminalling and processing services; and other pipelines, which transport products and crude oil from its refineries to nearby facilities in Salt Lake City and Los Angeles. The Gathering and Processing segment includes crude oil and natural gas pipeline gathering systems in the Bakken Shale/Williston Basin area of North Dakota and Montana; the Green River Basin, Uinta Basin, and Vermillion Basin in the states of Utah, Colorado, and Wyoming; the Delaware Basin in the Permian Basin area of West Texas and Southern New Mexico; and the Four Corners area of Northwestern New Mexico, as well as crude trucking operations, and gas processing and fractionation complexes. The Wholesale segment consists of bulk petroleum distribution facilities and a fleet of refined product delivery trucks. Tesoro Logistics GP, LLC operates as the general partner of the company. The company was formerly known as Tesoro Logistics LP and changed its name to Andeavor Logistics LP in August 2017. Andeavor Logistics LP was founded in 2010 and is headquartered in San Antonio, Texas.

About Shell Midstream Partners

Shell Midstream Partners, L.P. owns, operates, develops, and acquires pipelines and other midstream assets in the United States. Its crude oil pipeline systems include a 350 miles of Zydeco pipeline system; a 130-miles of delta pipeline; a 174-mile offshore Gulf of Mexico corridor pipeline; and a 75-mile offshore pipeline. The company also has interests in Mars pipeline system that is approximately 163 miles that delivers production received from the Mississippi Canyon area and Green Canyon and Walker Ridge to salt dome caverns in Clovelly, Louisiana; and a 105-mile Odyssey pipeline system, which transports crude oil in the offshore eastern Gulf of Mexico to markets in Louisiana. In addition, it has interests in a 367-mile Gulf of Mexico offshore pipeline that transports crude oil to Texas and Louisiana; a 70-mile crude oil pipeline that provides transportation for various oil producers in the eastern Gulf of Mexico; and a 89-mile crude oil Endymion pipeline system that offers transportation for various oil producers in the eastern Gulf of Mexico. In addition, it holds interests in Mars pipeline system that is approximately 163 miles that delivers production received from the Mississippi Canyon area and Green Canyon and Walker Ridge to salt dome caverns in Clovelly, Louisiana. The company's refined products pipeline systems consist of 160-mile Bengal pipeline system connecting four refineries in southern Louisiana to long-haul transportation pipelines; approximately 5,500 miles of pipeline connecting refineries along the Gulf Coast to approximately 265 marketing terminals; and Explorer pipeline system, an 1,830-mile common carrier petroleum products pipeline system, which extends from the Gulf Coast to the Midwest. Shell Midstream Partners GP LLC serves as the general partner of Shell Midstream Partners, L.P. The company was founded in 2014 and is based in Houston, Texas. Shell Midstream Partners, L.P. operates as a subsidiary of Shell Pipeline Company LP.

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