Comparing Kinder Morgan (NYSE:KMI) & Enbridge (NYSE:ENB)

Kinder Morgan (NYSE:KMI) and Enbridge (NYSE:ENB) are both large-cap energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, earnings, dividends, risk and valuation.

Profitability

This table compares Kinder Morgan and Enbridge’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Kinder Morgan	16.67%	8.11%	3.62%
Enbridge	10.16%	10.41%	3.10%

Risk & Volatility

Kinder Morgan has a beta of 0.75, meaning that its share price is 25% less volatile than the S&P 500. Comparatively, Enbridge has a beta of 0.79, meaning that its share price is 21% less volatile than the S&P 500.

Valuation and Earnings

This table compares Kinder Morgan and Enbridge”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kinder Morgan	$15.10 billion	4.11	$2.61 billion	$1.16	24.09
Enbridge	$38.22 billion	2.58	$3.97 billion	$1.94	23.33

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

Insider & Institutional Ownership

62.5% of Kinder Morgan shares are held by institutional investors. Comparatively, 54.6% of Enbridge shares are held by institutional investors. 12.7% of Kinder Morgan shares are held by insiders. Comparatively, 0.4% of Enbridge shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Dividends

Kinder Morgan pays an annual dividend of $1.17 per share and has a dividend yield of 4.2%. Enbridge pays an annual dividend of $2.72 per share and has a dividend yield of 6.0%. Kinder Morgan pays out 100.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Enbridge pays out 140.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Kinder Morgan has increased its dividend for 1 consecutive years and Enbridge has increased its dividend for 2 consecutive years. Enbridge is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of recent ratings for Kinder Morgan and Enbridge, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kinder Morgan	0	7	9	0	2.56
Enbridge	0	5	4	0	2.44

Kinder Morgan presently has a consensus price target of $30.40, suggesting a potential upside of 8.79%. Enbridge has a consensus price target of $67.00, suggesting a potential upside of 48.03%. Given Enbridge’s higher probable upside, analysts plainly believe Enbridge is more favorable than Kinder Morgan.

Summary

Kinder Morgan beats Enbridge on 9 of the 17 factors compared between the two stocks.

About Kinder Morgan

Kinder Morgan, Inc. operates as an energy infrastructure company primarily in North America. The company operates through Natural Gas Pipelines, Products Pipelines, Terminals, and CO2 segments. The Natural Gas Pipelines segment owns and operates interstate and intrastate natural gas pipeline, and storage systems; natural gas gathering systems and natural gas processing and treating facilities; natural gas liquids fractionation facilities and transportation systems; and liquefied natural gas gasification, liquefaction, and storage facilities. The Products Pipelines segment owns and operates refined petroleum products, and crude oil and condensate pipelines; and associated product terminals and petroleum pipeline transmix facilities. The Terminals segment owns and/or operates liquids and bulk terminals that stores and handles various commodities, including gasoline, diesel fuel, renewable fuel and feedstocks, chemicals, ethanol, metals, and petroleum coke; and owns tankers. The CO2 segment produces, transports, and markets CO2 to recovery and production crude oil from mature oil fields; owns interests in/or operates oil fields and gasoline processing plants; and operates a crude oil pipeline system in West Texas, as well as owns and operates RNG and LNG facilities. It owns and operates approximately 82,000 miles of pipelines and 139 terminals. The company was formerly known as Kinder Morgan Holdco LLC and changed its name to Kinder Morgan, Inc. in February 2011. Kinder Morgan, Inc. was incorporated in 2006 and is headquartered in Houston, Texas.

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.