Ranking The Dividend Challengers, Part 11

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Includes: AMID, APLP, EEP, ENLK, EQM, MMLP, NGL, SUN, TLLP, WES, WPZ
by: Stan Stafford

Summary

Dividend Challengers are stocks that have 5+ years of increased dividends. It is part of the U.S. Dividend Champions list maintained by Dave Fish.

In this series of articles, I will be ranking the Dividend Challengers of various industry sectors based on 15 different metrics.

Out of this group of stocks, my top picks are Sunoco, Tesoro Logistics, and EQT Midstream Partners.

Overview

In this series of articles, I will be ranking the Dividend Challengers of various industry sectors based on 15 different metrics. Dividend Challengers are stocks that have 5+ years of consecutive dividend growth. The stocks are part of the U.S. Dividend Champions list that is maintained by Dave Fish.

For part 11 of this series, I will be reviewing the Dividend Challengers that are in the Oil & Gas industry with a focus on MLPs. The stocks include:

  • American Midstream Partners (NYSE:AMID)
  • Enbridge Energy Partners (NYSE:EEP)
  • EQT Midstream Partners (NYSE:EQM)
  • Martin Midstream Partners (NASDAQ:MMLP)
  • Tesoro Logistics (NYSE:TLLP)
  • Western Gas Partners (NYSE:WES)
  • Williams Partners (NYSE:WPZ)
  • Archrock Partners (NASDAQ:APLP)
  • EnLink Midstream Partners (NYSE:ENLK)
  • NGL Energy Partners (NYSE:NGL)
  • Sunoco (NYSE:SUN)

Three of these stocks recently cut their dividend. These stocks include:

  • American Midstream Partners
  • Archrock Partners
  • NGL Energy Partners

These stocks will be ranked based on the following 15 metrics:

  • Dividend Yield
  • Dividend Growth (past five years)
  • Payout Ratio
  • Revenue Growth (past five years)
  • Earnings Growth (past five years)
  • Book Value Growth (past five years)
  • Stock Price Appreciation (past five years)
  • PEG ratio (trailing twelve months)
  • Price to Free Cash Flow ratio (trailing twelve months)
  • Return on Assets (trailing twelve months)
  • Return on Equity (trailing twelve months)
  • Price to Book Value
  • Earnings Yield
  • Profit Margin (trailing twelve months)
  • Asset Utilization

Dividend Yield

Stock Value Ranking
American Midstream 15.07% 3
Enbridge Energy Partners 10.83% 7
EQT Midstream Partners 3.46% 11
Martin Midstream Partners 14.59% 4
Tesoro Logistics 6.26% 10
Western Gas Partners 6.38% 9
Williams Partners 11.24% 5
Archrock Partners 16.38% 2
EnLink Midstream Partners 10.97% 6
NGL Energy Partners 16.93% 1
Sunoco 9.18% 8
Click to enlarge

Dividend Growth

Stock Value Ranking
American Midstream 53.35% 7
Enbridge Energy Partners 9.48% 9
EQT Midstream Partners 102.9% 5
Martin Midstream Partners 6.56% 10
Tesoro Logistics 230.9% 2
Western Gas Partners 101.2% 6
Williams Partners 148.9% 3
Archrock Partners (40.9%) 11
EnLink Midstream Partners 25.81% 8
NGL Energy Partners 133.7% 4
Sunoco 2.77K% 1
Click to enlarge

Payout Ratio

Stock Value Ranking
American Midstream (22.5%) 8
Enbridge Energy Partners 1.53K% 7
EQT Midstream Partners 5.53% 1
Martin Midstream Partners 360.3% 6
Tesoro Logistics 116.3% 3
Western Gas Partners 265.7% 5
Williams Partners (69.2%) 10
Archrock Partners (149%) 11
EnLink Midstream Partners (27.5%) 9
NGL Energy Partners 836.1% 6
Sunoco 97.62% 2
Click to enlarge

Revenue Growth

Stock Value Ranking
American Midstream (8.82%) 10
Enbridge Energy Partners (45.2%) 11
EQT Midstream Partners 500.7% 4
Martin Midstream Partners (1.19%) 9
Tesoro Logistics 2.88k% 1
Western Gas Partners 92.27% 8
Williams Partners 1.30k% 2
Archrock Partners 137.0% 6
EnLink Midstream Partners 132.0% 7
NGL Energy Partners 1.20k% 3
Sunoco 301.8% 5
Click to enlarge

Earnings Growth

Stock Value Ranking
American Midstream current negative earnings 11
Enbridge Energy Partners (160%) 7
EQT Midstream Partners 137.2% 1
Martin Midstream Partners (50.3%) 4
Tesoro Logistics 27.66% 3
Western Gas Partners (120%) 5
Williams Partners (506%) 8
Archrock Partners (60.1K%) 10
EnLink Midstream Partners (13.0K%) 9
NGL Energy Partners (125%) 6
Sunoco 125.7% 2
Click to enlarge

Book Value Growth

Stock Value Ranking
American Midstream

15.64%

11
Enbridge Energy Partners

19.22%

10
EQT Midstream Partners 802.9% 4
Martin Midstream Partners 16.81% 9
Tesoro Logistics 916.4% 2
Western Gas Partners 90.36% 7
Williams Partners 825.2% 3
Archrock Partners 29.32% 8
EnLink Midstream Partners 375.6% 6
NGL Energy Partners 425.0% 5
Sunoco 2.55K% 1
Click to enlarge

Stock Price Appreciation

Stock Value Ranking
American Midstream (43.4%) 10
Enbridge Energy Partners (32.2%) 7
EQT Midstream Partners 214.4% 1
Martin Midstream Partners (39.9%) 9
Tesoro Logistics 103.9% 2
Western Gas Partners 35.16% 4
Williams Partners 19.40% 5
Archrock Partners (51.9%) 11
EnLink Midstream Partners (20.8%) 6
NGL Energy Partners (37.8%) 8
Sunoco 46.36% 3
Click to enlarge

PEG Ratio

Stock Value Ranking
American Midstream -0.01x 10
Enbridge Energy Partners 0.01x 1
EQT Midstream Partners 0.66x 7
Martin Midstream Partners 0.02x 2
Tesoro Logistics 0.17x 5
Western Gas Partners 1.76x 9
Williams Partners 0.92x 8
Archrock Partners 0.59x 6
EnLink Midstream Partners 0.11x 3
NGL Energy Partners -0.15x 11
Sunoco 0.13x 4
Click to enlarge

Price to Free Cash Flow Ratio

Stock Value Ranking
American Midstream 24.55x 6
Enbridge Energy Partners 20304.71x 11
EQT Midstream Partners 123.00x 10
Martin Midstream Partners 7.35x 2
Tesoro Logistics 22.15x 5
Western Gas Partners 36.04x 7
Williams Partners 70.11x 9
Archrock Partners 16.78x 3
EnLink Midstream Partners 39.09x 8
NGL Energy Partners 2.82x 1
Sunoco 19.04x 4
Click to enlarge

Return on Assets

Stock Value Ranking
American Midstream (27.9%) 11
Enbridge Energy Partners 0.39% 7
EQT Midstream Partners 25.30% 1
Martin Midstream Partners 2.66% 5
Tesoro Logistics 6.21% 2
Western Gas Partners

3.16%

4
Williams Partners (7.60%) 9
Archrock Partners (5.00%) 8
EnLink Midstream Partners (22.0%) 10
NGL Energy Partners 0.62% 6
Sunoco 4.93% 3
Click to enlarge

Return on Equity

Stock Value Ranking
American Midstream (122%) 11
Enbridge Energy Partners 1.39% 7
EQT Midstream Partners 45.60% 1
Martin Midstream Partners 8.78% 4
Tesoro Logistics

18.16%

2
Western Gas Partners 6.04% 5
Williams Partners (15.1%) 8
Archrock Partners (16.3%) 9
EnLink Midstream Partners (39.2%) 10
NGL Energy Partners 2.12% 6
Sunoco 12.21% 3
Click to enlarge

Price to Book Value

Stock Value Ranking
American Midstream 4.27x 11
Enbridge Energy Partners 1.92x 7
EQT Midstream Partners 3.64x 10
Martin Midstream Partners 2.10x 8
Tesoro Logistics 2.66x 9
Western Gas Partners 1.87x 6
Williams Partners 0.81x 2
Archrock Partners 1.52x 5
EnLink Midstream Partners 1.08x 3
NGL Energy Partners 0.74x 1
Sunoco 1.22x 4
Click to enlarge

Earnings Yield

Stock Value Ranking
American Midstream (43.0%) 11
Enbridge Energy Partners (2.07%) 7
EQT Midstream Partners 6.54% 2
Martin Midstream Partners 2.59% 4
Tesoro Logistics 4.90% 3
Western Gas Partners (0.81%) 5
Williams Partners (10.2%) 8
Archrock Partners (15.0%) 9
EnLink Midstream Partners (27.5%) 10
NGL Energy Partners (1.25%) 6
Sunoco 8.34% 1
Click to enlarge

Profit Margin

Stock Value Ranking
American Midstream (119%) 11
Enbridge Energy Partners 1.50% 6
EQT Midstream Partners 88.66% 1
Martin Midstream Partners 3.87% 4
Tesoro Logistics 26.11% 2
Western Gas Partners 14.30% 3
Williams Partners (51.1%) 10
Archrock Partners (16.1%) 8
EnLink Midstream Partners (44.8%) 9
NGL Energy Partners 0.32% 7
Sunoco 1.71% 5
Click to enlarge

Asset Utilization

Stock Value Ranking
American Midstream 0.23x 9
Enbridge Energy Partners 0.26x 7
EQT Midstream Partners 0.29x 6
Martin Midstream Partners 0.69x 3
Tesoro Logistics 0.24x 8
Western Gas Partners 0.22x 10
Williams Partners 0.15x 11
Archrock Partners 0.31x 5
EnLink Midstream Partners 0.49x 4
NGL Energy Partners 1.91x 2
Sunoco 2.88x 1
Click to enlarge

Final Rankings

The Heavyweights

  • Sunoco - Total Score of 47
  • Tesoro Logistics - Total Score of 59
  • EQT Midstream Partners - Total Score of 65
  • NGL Energy Partners - Total Score of 73

The Middleweights

  • Martin Midstream Partners - Total Score of 83
  • Western Gas Partners - Total Score of 93
  • Williams Partners - Total Score of 101

The Lightweights

  • EnLink Midstream Partners - Total Score of 108
  • Enbridge Energy Partners - Total Score of 111
  • Archrock Partners - Total Score of 112
  • American Midstream Partners - Total Score of 140

Conclusion

Out of this group of stocks, Sunoco, Tesoro Logistics, NGL Energy Partners, and EQT Midstream Partners are the heavyweight stocks, scoring significantly better than the remaining 7 middle and lightweight stocks. NGL recently cut its dividend by 39%. While this move could remove the stock from most dividend growth investors radar, I believe the stock is still worth looking at even if it is at more of a middleweight.

Even with the dividend cut, NGL still provides a double digit yield that should be sustainable as long as oil prices do not decline further. While NGL certainly has risk associated with it (as do all MLPs), I believe that the recent investment from Oaktree Capital Management gives credence to the fact that NGL still has value. If the reduction in its dividend can help reduce its debt and fund future projects, then it has a good shot at future growth.

I believe Sunoco is the best option out of these stocks based on its overall performance compared to the other stocks reviewed. And while other stocks have either cut or left their dividends the same during this tough market environment Sunoco was still able to increase its quarterly dividend recently. While the debt level is more than I like, I believe the stock's 10% dividend yield is worth the associated risk.

Due to the tough market environment these MLPs are currently facing, I don't recommend purchases of any of the remaining middleweight or lightweight stocks. I think Sunoco, Tesoro Logistics, and EQT Midstream Partners are the best options in this industry right now. I believe NGL is still worth a look as well for those that do not view its recent dividend cut as a deal breaker. As always, I suggest individual investors perform their own research before making any investment decisions.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.