A Greener Future Starts With Natural Gas, World Energy Chiefs Say

World energy ministers representing about two thirds of the global population tussled over how the world can achieve a cleaner energy future. The compromise answer: Natural gas, at least for now.

A consensus statement from G20 energy ministers meeting in Argentina cited the potential of natural gas “to expand significantly over the coming decades.” Meanwhile, the group said that nations that “opt to enhance their renewable energy strategies” should boost investment and financing within that arena.

“Gas will play a vital role in every transition,” as the world strives to meet targets for emissions cuts laid out in the 2016 Paris Agreement, Thorsten Herdan, Germany’s Director General of Energy Policy, said in a panel as the meeting ended on Friday. A next step: renewable gases like hydrogen, he said.

The two-day meeting, held in snow-swept Bariloche, Argentina, was attended by key energy officials from a wide range of countries, including U.S. Energy Secretary Rick Perry.

The language in the consensus statement, which included mention of the Paris agreement, was the subject of several rounds of negotiations, with European Union nations and the U.S. trading at least four major proposals and counterproposals. Herdan conceded the wording was fiercely debated.

U.S. Concession

The result represented a concession for the U.S. by acknowledging the importance of transitions to cleaner energy sources "to achieve emissions reductions, and for those countries that are determined to implement the Paris agreement."

The wording “is not as clear as everyone would liked to have it,” Herdan said. “But at the end of the day that was the compromise.”

The result contrasted the outcome from last July’s G20 energy summit, when the final statement emphasized the U.S. decision to leave the global carbon-cutting pact and highlighted the other nations’ commitment to it.

"The leaders of the other G20 members state that the Paris agreement is irreversible," the communique said last July. The U.S. also fought successfully last year for language emphasizing its commitment to "work closely with other countries to help them access and use fossil fuels more cleanly and efficiently."

At at time when the U.S. is seeking to revive its coal industry, Herdan argued the world should be moving away from the fossil fuel. But he said the G20 wasn’t a club for telling others what to do.

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OraSure Technologies (OSUR) Given Average Rating of “Hold” by Brokerages

OraSure Technologies (NASDAQ:OSUR) has earned a consensus recommendation of “Hold” from the seven brokerages that are covering the firm, MarketBeat Ratings reports. Four investment analysts have rated the stock with a hold recommendation and two have assigned a buy recommendation to the company. The average twelve-month price objective among brokers that have covered the stock in the last year is $20.00.

OSUR has been the subject of a number of research analyst reports. Zacks Investment Research cut shares of OraSure Technologies from a “hold” rating to a “sell” rating in a report on Wednesday, April 18th. BidaskClub raised shares of OraSure Technologies from a “buy” rating to a “strong-buy” rating in a report on Thursday, March 15th. ValuEngine raised shares of OraSure Technologies from a “hold” rating to a “buy” rating in a report on Friday, March 2nd. Finally, TheStreet cut shares of OraSure Technologies from a “b” rating to a “c+” rating in a report on Wednesday, May 2nd.

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Several institutional investors have recently modified their holdings of the stock. Dynamic Technology Lab Private Ltd purchased a new position in shares of OraSure Technologies during the first quarter worth $205,000. Principal Financial Group Inc. raised its holdings in shares of OraSure Technologies by 3.3% during the first quarter. Principal Financial Group Inc. now owns 491,188 shares of the medical instruments supplier’s stock worth $8,296,000 after purchasing an additional 15,717 shares during the last quarter. WINTON GROUP Ltd purchased a new position in shares of OraSure Technologies during the first quarter worth $727,000. Legal & General Group Plc raised its holdings in shares of OraSure Technologies by 3.0% during the first quarter. Legal & General Group Plc now owns 113,160 shares of the medical instruments supplier’s stock worth $1,907,000 after purchasing an additional 3,291 shares during the last quarter. Finally, Cubist Systematic Strategies LLC purchased a new position in shares of OraSure Technologies during the first quarter worth $139,000. 92.71% of the stock is owned by hedge funds and other institutional investors.

Shares of NASDAQ OSUR traded up $0.37 during midday trading on Thursday, reaching $17.87. The company had a trading volume of 204,651 shares, compared to its average volume of 606,255. The stock has a market cap of $1.07 billion, a P/E ratio of 35.04, a P/E/G ratio of 4.36 and a beta of 1.68. OraSure Technologies has a 1 year low of $12.86 and a 1 year high of $23.01.

OraSure Technologies (NASDAQ:OSUR) last posted its quarterly earnings results on Wednesday, May 2nd. The medical instruments supplier reported ($0.03) earnings per share (EPS) for the quarter, topping the Zacks’ consensus estimate of ($0.06) by $0.03. The business had revenue of $41.99 million during the quarter, compared to analysts’ expectations of $40.53 million. OraSure Technologies had a net margin of 9.28% and a return on equity of 6.58%. The business’s quarterly revenue was up 29.0% on a year-over-year basis. During the same quarter last year, the company posted $0.21 earnings per share. sell-side analysts forecast that OraSure Technologies will post 0.32 earnings per share for the current year.

OraSure Technologies Company Profile

OraSure Technologies, Inc, together with its subsidiaries, develops, manufactures, markets, and sells oral fluid diagnostic products and specimen collection devices in the United States, Europe, and internationally. It operates in two segments, OSUR and DNAG. The company also offers other diagnostic products, such as immunoassays and other in vitro diagnostic tests.

McDonald's to test straw alternatives in U.S.

Under pressure by environmentalists,McDonalds said Friday that it will start testing alternatives to plasticstraws at select locations in the U.S. later this year.

The burger giant also announced that it will adopt more eco-friendly paper straws across all its 1,361 restaurants in the United Kingdomand Ireland, a regionwhere the company started testing the alternative to plastic straws earlier this year. The regionalrollout begins in September.

Single-use straws are the scourge of the packaging-waste worldbecause they dont easily biodegradeand aren’t really necessary for most people when it comes to gulping a soft drink.

The activist group SumOfUs estimates that every day, McDonalds alone dispenses millions of plastic straws that customers soon discard, leaving them to litter beaches or clog waterways and fill trash dumps.

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McDonalds is committed to using our scale for good and working to find sustainable solutions for plastic straws globally, Francesca DeBiase, the company’s executive vice president forglobal supply chain and sustainability, said in a statement. We hope this work will support industry wide change.”

The Chicago-based fast-food chain said it has been dabbling in disposable-straw alternatives in Belgium, too. Later this year, it will also begin trying them in France, Sweden and Norway. And in Malaysia, McDonald’s will trya new approach to dispensing straws — giving them out only if a customer requests one.

McDonald’s move is a “significant contribution to help our natural environment,” saidMichael Gove, secretary of state for environment, food and rural affairs in the U.K., in a statement.We want more companies to say no to unnecessary single-use plastics.”

McDonald’s isn’t the only major straw user to start tossing them aside.Royal Caribbean has promised to nix them by the end of this year, joining fellow cruise companies Hurtigruten and Peregrine Adventures who’ve made similar pledges.Alaska Airlines is gettingrid of plastic drink stirrers starting next month. And the food service companyBon App茅tit Management, whose 1,000-plus locations in 33 states range fromthe Art Institute of Chicago to the University of Portland, will stop using plastic straws and stirrers by September 2019.

Straws are coming under attack not only in corporateboardrooms, but also in government. Both California and New York City are considering banning them.

Eric Goldstein, senior attorney for the Natural Resources Defense Council, said the announcement from as big a company as McDonald’s reflects the growing tide of concern about single-use plastics worldwide.

“The drive to eliminate plastic straws is a good step and it’s symbolic — and symbols are important,” he said. “You could say it should’ve been done earlier, but it’s certainly better late than never..”

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Veterinarians say the sick pilot whale may have thought the plastic bags and other debris were food. USA TODAY

Follow USA TODAY reporter Zlati Meyer on Twitter: @ZlatiMeyer

3 Top Tech Stocks to Buy in June

Tech stocks are almost always popular, and it’s easy to see why. No other industry offers more of a potential for blockbuster returns than technology, as it often represents the Next Big Thing in business. Many of the most valuable companies in the world today, like Facebook, Alphabet, and Amazon, were just start-ups 15 or 20 years ago. The tech-heavy Nasdaq has also easily outperformed the S&P 500, doubling the S&P’s 105% return over the last decade.

With tech stocks continuing to rally, it’s not too late to find some winners. Keep reading to see why our Fool.com contributors recommend salesforce.com (NYSE:CRM), Apple (NASDAQ:AAPL), and Stitch Fix (NASDAQ:SFIX).

Rising candlestick bar chart in various shades of blue

Image source: Getty Images.

The force is strong with this cloud provider

Danny Vena (Salesforce): You might not think that the sleepy segment of customer relationship management (CRM) would be a place to look for solid growth. If that’s the case, you’d be surprised to learn that CRM software specialist Salesforce has been a powerhouse of consistent growth, with its stock up more than 45% in the last year alone.

Not only did the company put up 25% year-over-year revenue growth in its most recent quarter, but late last year Salesforce also laid out plans to double its $10 billion in annual sales to at least $20 billion by 2022. The company has taken its projections out even further, looking to double its revenue again to $40 billion by 2028. Salesforce believes its total addressable market will grow from $72 billion in 2016 to $120 billion by 2021.

According to research company Gartner, CRM became “the largest of all software markets” last year, generating revenue of $39.5 billion, and “will be the fastest growing market in 2018.” This provides Salesforce a fertile field on which to make good on its claims. It’s also worth noting that Gartner just named Salesforce as a leader in its Magic Quadrant for the CRM Customer Engagement Center for the 10th successive year.

The Gartner Magic Quadrant for CRM Customer Engagement Center graph showing a variety of players in the CRM space with Salesforce as the clear leader.

Image source: Gartner.

Salesforce has several competitive advantages that will help the cloud player achieve its ambitious goals. The company has been adding to its suite of products, having made 22 acquisitions in the past three years. This strategy of expanding into new markets now gives the company a larger foothold with its Sales Cloud, Service Cloud, Marketing and Commerce Cloud, and the Salesforce Platform (which encompasses all of the others).

The company has also been increasing its artificial intelligence (AI) proficiency with the Einstein system, which was designed to enhance its underlying product portfolio. Salesforce recently revealed that it was delivering nearly “two billion AI predictions per day with Einstein.”

With a solid track record, an expanding market opportunity, and a detailed plan for growth, I think Salesforce is the top tech stock to buy in June.

Always bet on the favorite

Chris Neiger (Apple): Apple doesn’t need an introduction, but just in case you’ve forgotten just how influential this tech company still is, I’ll give you a little refresher. Apple is the No. 2 global smartphone maker behind Samsung (though Apple leads with 51% of global smartphone revenue, thanks to the iPhone’s premium pricing). The company’s Apple Watch sales have helped it recently become the worldwide leader in wearables shipments. And the Mac maker continues to build out its services, like Apple Pay and Apple Music, further tying its customers into its expanding ecosystem.

Critics like to say that Apple’s innovation is gone. That’s a debate for another time, but what the naysayers fail to recognize is that the company has continued to deliver strong results for its investors. Apple’s revenue in the most recent quarter was $61.1 billion, up 16% from the year-ago quarter. Earnings per share jumped 30% year over year to $2.73, outpacing analysts’ consensus estimate of $2.68 per share. The company’s share price has seen a few dips over the past year, but it’s still managed to gain about 25%.

Apple not only looks like an attractive buy based on its consistent growth and its dominance in the smartphone and wearable spaces, but also because it’s been able to grow its services revenue at a rapid pace. In the second quarter of fiscal 2018, services revenue popped 30% to $9.1 billion. That’s a significant jump in sales, and it shows that Apple can find new revenue streams outside of the devices segment.

Investors will be happy to know that this tech giant is also giving its shareholders much more attention these days. The company just raised its dividend by 16%, and Apple’s board announced a new $100 billion stock repurchase program. If that’s not enticing enough for you to hit the buy button, then consider that Apple’s shares are trading at just 14.5 times the company’s forward earnings — well below the tech industry average.

Apple’s continued sales and earnings growth, its dominant and expanding position in devices and services, and its recent focus on shareholder value should be enough to convince many to pick up this stock. Add in Apple’s relatively cheap price, and you’re getting one of the best tech stocks for a steal.

This company is an e-commerce innovator

Jeremy Bowman (Stitch Fix): While Stitch Fix may not be a traditional tech company, as its business revolves around selling clothes, the company does so through a personal styling service that relies on data science and algorithms to help determine what customers like. The company believes its data-science capability gives it an advantage over competitors, and that component makes the stock worth considering for tech investors. In many ways, that recommendation engine gives the company a number of similarities to Netflix.

Fresh off a 26.5% surge last week following its third-quarter earnings report, Stitch Fix now looks stronger than ever. Revenue growth accelerated 29% in the quarter to $316.5 million, and the styling service posted net income of $9.5 million, good for a profit margin of 3%. Unlike many start-ups, Stitch Fix is profitable and has been for several years. Its earnings per share of $0.09 tripled Wall Street estimates of $0.03.

Even better for investors, the company has several growth opportunities on the horizon. In the report, management said it would launch Stitch Fix Kids in time for this year’s back-to-school season, targeting the $70 billion U.S. children’s apparel market for the first time. Earlier this year, the company began selling Extras — intimates like underwear and socks — for women, marking the first time it’s allowed incremental sales on the platform; this could pave the way for multiple new revenue streams. (The company’s standard service ships five items at a time to customers; they keep what they like and return the rest.)

The launch in Kids follows expansions into menswear and women’s plus-sized clothing in the last two years, showing the company is building momentum on multiple fronts. As the largest e-commerce styling service, Stitch Fix has an advantage over traditional retailers and smaller competitors like Trunk Club. After the latest report, investors may just be starting to realize the opportunity here.

Envestnet Asset Management Inc. Trims Stake in Hilton Worldwide (HLT)

Envestnet Asset Management Inc. trimmed its stake in shares of Hilton Worldwide (NYSE:HLT) by 72.5% in the first quarter, HoldingsChannel.com reports. The fund owned 3,679 shares of the company’s stock after selling 9,684 shares during the period. Envestnet Asset Management Inc.’s holdings in Hilton Worldwide were worth $290,000 at the end of the most recent reporting period.

Several other hedge funds also recently bought and sold shares of HLT. Mutual of America Capital Management LLC lifted its position in shares of Hilton Worldwide by 10.9% during the 4th quarter. Mutual of America Capital Management LLC now owns 26,098 shares of the company’s stock valued at $2,084,000 after acquiring an additional 2,574 shares during the period. Aperio Group LLC lifted its position in shares of Hilton Worldwide by 7.9% during the 4th quarter. Aperio Group LLC now owns 38,416 shares of the company’s stock valued at $3,068,000 after acquiring an additional 2,819 shares during the period. Public Employees Retirement Association of Colorado lifted its position in shares of Hilton Worldwide by 4.9% during the 4th quarter. Public Employees Retirement Association of Colorado now owns 37,765 shares of the company’s stock valued at $3,016,000 after acquiring an additional 1,752 shares during the period. Crossmark Global Holdings Inc. lifted its position in shares of Hilton Worldwide by 13.7% during the 4th quarter. Crossmark Global Holdings Inc. now owns 16,577 shares of the company’s stock valued at $1,324,000 after acquiring an additional 1,997 shares during the period. Finally, Teacher Retirement System of Texas acquired a new stake in shares of Hilton Worldwide during the 4th quarter valued at approximately $4,257,000. Institutional investors own 74.60% of the company’s stock.

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In other Hilton Worldwide news, major shareholder Tourism Group Co. Ltd. Hna sold 66,000,000 shares of the business’s stock in a transaction on Friday, April 13th. The stock was sold at an average price of $73.00, for a total value of $4,818,000,000.00. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available through the SEC website. Insiders own 1.70% of the company’s stock.

Several research analysts recently issued reports on HLT shares. TheStreet upgraded Hilton Worldwide from a “c” rating to a “b” rating in a research report on Wednesday, February 14th. SunTrust Banks lifted their price objective on Hilton Worldwide to $92.00 and gave the stock a “buy” rating in a research report on Thursday, February 15th. Royal Bank of Canada restated a “buy” rating and set a $93.00 price objective on shares of Hilton Worldwide in a research report on Tuesday, February 27th. Zacks Investment Research upgraded Hilton Worldwide from a “hold” rating to a “buy” rating and set a $88.00 price objective for the company in a research report on Wednesday, March 7th. Finally, Deutsche Bank lifted their price objective on Hilton Worldwide from $92.00 to $94.00 and gave the stock a “buy” rating in a research report on Friday, April 20th. Ten equities research analysts have rated the stock with a hold rating, nine have issued a buy rating and one has given a strong buy rating to the stock. Hilton Worldwide currently has a consensus rating of “Buy” and an average price target of $84.28.

Shares of Hilton Worldwide opened at $83.81 on Wednesday, according to MarketBeat.com. The company has a debt-to-equity ratio of 3.75, a current ratio of 0.81 and a quick ratio of 0.81. The firm has a market capitalization of $25.23 billion, a price-to-earnings ratio of 38.71, a price-to-earnings-growth ratio of 3.13 and a beta of 1.32. Hilton Worldwide has a fifty-two week low of $60.54 and a fifty-two week high of $88.11.

Hilton Worldwide (NYSE:HLT) last issued its quarterly earnings results on Thursday, April 26th. The company reported $0.55 earnings per share for the quarter, beating the Thomson Reuters’ consensus estimate of $0.51 by $0.04. The company had revenue of $2.07 billion during the quarter, compared to the consensus estimate of $2.29 billion. Hilton Worldwide had a return on equity of 41.44% and a net margin of 14.87%. Hilton Worldwide’s revenue was up 9.4% on a year-over-year basis. During the same period in the previous year, the firm posted $0.38 EPS. analysts forecast that Hilton Worldwide will post 2.69 EPS for the current year.

The firm also recently declared a quarterly dividend, which will be paid on Friday, June 29th. Shareholders of record on Friday, May 11th will be issued a $0.15 dividend. The ex-dividend date is Thursday, May 10th. This represents a $0.60 annualized dividend and a yield of 0.72%. Hilton Worldwide’s dividend payout ratio (DPR) is presently 30.00%.

Hilton Worldwide Company Profile

Hilton Worldwide Holdings Inc, a hospitality company, owns, leases, manages, develops, and franchises hotels and resorts. It operates through two segments, Management and Franchise; and Ownership. The company engages in the hotel management and licensing of its brands to franchisees. It operates hotels under the Waldorf Astoria Hotels & Resorts, Conrad Hotels & Resorts, Canopy by Hilton, Hilton Hotels & Resorts, Curio – A Collection by Hilton, DoubleTree by Hilton, Tapestry Collection by Hilton, Embassy Suites by Hilton, Hilton Garden Inn, Hampton by Hilton, Tru by Hilton, Homewood Suites by Hilton, Home2 Suites by Hilton, Tapestry Collection by Hilton, and Hilton Grand Vacations brands.

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Institutional Ownership by Quarter for Hilton Worldwide (NYSE:HLT)

HeadHead Comparison: NetScout Systems (NTCT) vs. Altaba (AABA)

NetScout Systems (NASDAQ: NTCT) and Altaba (NASDAQ:AABA) are both computer and technology companies, but which is the superior business? We will compare the two companies based on the strength of their risk, institutional ownership, earnings, profitability, dividends, valuation and analyst recommendations.

Analyst Ratings

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This is a summary of current recommendations and price targets for NetScout Systems and Altaba, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NetScout Systems 0 4 2 0 2.33
Altaba 0 2 5 0 2.71

NetScout Systems presently has a consensus target price of $27.80, suggesting a potential upside of 1.09%. Altaba has a consensus target price of $89.29, suggesting a potential upside of 10.85%. Given Altaba’s stronger consensus rating and higher probable upside, analysts clearly believe Altaba is more favorable than NetScout Systems.

Valuation & Earnings

This table compares NetScout Systems and Altaba’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
NetScout Systems $986.79 million 2.24 $79.81 million $0.99 27.78
Altaba $5.17 billion 13.61 -$214.32 million N/A N/A

NetScout Systems has higher earnings, but lower revenue than Altaba.

Insider and Institutional Ownership

72.8% of Altaba shares are owned by institutional investors. 3.5% of NetScout Systems shares are owned by insiders. Comparatively, 24.0% of Altaba shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Risk & Volatility

NetScout Systems has a beta of 1.52, suggesting that its share price is 52% more volatile than the S&P 500. Comparatively, Altaba has a beta of 1.97, suggesting that its share price is 97% more volatile than the S&P 500.

Profitability

This table compares NetScout Systems and Altaba’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NetScout Systems 8.06% 4.07% 2.71%
Altaba N/A N/A N/A

Summary

Altaba beats NetScout Systems on 9 of the 13 factors compared between the two stocks.

NetScout Systems Company Profile

NetScout Systems, Inc. provides real-time operational intelligence and performance analytics for service assurance, and cybersecurity solutions in the United States, Europe, Asia, and internationally. The company offers nGeniusONE management software that enables customers to predict, preempt, and resolve network and service delivery problems, as well as facilitate the optimization and capacity planning of their network infrastructures; and specialized platforms and analytic modules that enable its customers to analyze and troubleshoot traffic in radio access and WiFi networks, as well as gain timely insight into services, applications, and systems. It also provides Intelligent Data Sources under the Infinistream brand name that provide real-time collection and analysis of data from the network; packet flow switching solutions that delivers targeted network traffic access to an increasing number of monitoring and security systems; and a suite of test access points that enable non-disruptive access to network traffic with multiple link type and speed options. In addition, the company offers portable network analysis and troubleshooting tools, which help customers identify key issues that impact network and application performance. Further, it provides security solutions that enable service providers and enterprises to protect their networks against DDoS attacks; and threat detection solutions that enable enterprises to identify and investigate advanced threat campaigns that present tangible risks to the integrity of their networks. The company serves enterprise customers in industries, such as financial services, technology, manufacturing, healthcare, utilities, education, transportation, and retail; mobile operators, wireline operators, and cable operators; and governmental agencies through a direct sales force, and indirect reseller and distribution channels. NetScout Systems, Inc. was founded in 1984 and is headquartered in Westford, Massachusetts.

Altaba Company Profile

Altaba Inc. operates as a non-diversified, closed-end management investment company in the United States. Its assets consist primarily of equity investments, short-term debt investments, and cash. The company was formerly known as Yahoo! Inc. and changed its name to Altaba Inc. in June 2017. Altaba Inc. was founded in 1994 and is based in New York, New York.

Woodward, Inc.Common Stock (WWD) Expected to Post Quarterly Sales of $570.40 Million

Wall Street analysts expect Woodward, Inc.Common Stock (NASDAQ:WWD) to announce $570.40 million in sales for the current quarter, Zacks reports. Four analysts have made estimates for Woodward, Inc.Common Stock’s earnings, with the highest sales estimate coming in at $574.00 million and the lowest estimate coming in at $565.98 million. Woodward, Inc.Common Stock posted sales of $548.62 million during the same quarter last year, which suggests a positive year-over-year growth rate of 4%. The company is scheduled to issue its next earnings results on Monday, July 23rd.

On average, analysts expect that Woodward, Inc.Common Stock will report full year sales of $2.23 billion for the current fiscal year, with estimates ranging from $2.21 billion to $2.28 billion. For the next financial year, analysts anticipate that the business will report sales of $2.46 billion per share, with estimates ranging from $2.36 billion to $2.71 billion. Zacks Investment Research’s sales averages are a mean average based on a survey of sell-side research analysts that follow Woodward, Inc.Common Stock.

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Woodward, Inc.Common Stock (NASDAQ:WWD) last announced its earnings results on Monday, April 23rd. The technology company reported $0.82 EPS for the quarter, topping the Zacks’ consensus estimate of $0.79 by $0.03. Woodward, Inc.Common Stock had a return on equity of 14.56% and a net margin of 7.94%. The company had revenue of $548.25 million for the quarter, compared to analysts’ expectations of $526.84 million. Woodward, Inc.Common Stock’s quarterly revenue was up 9.6% on a year-over-year basis.

A number of research firms have commented on WWD. BidaskClub raised Woodward, Inc.Common Stock from a “hold” rating to a “buy” rating in a report on Friday, June 1st. Wood & Company reissued a “hold” rating on shares of Woodward, Inc.Common Stock in a report on Tuesday, April 24th. Stephens set a $89.00 price target on Woodward, Inc.Common Stock and gave the company a “buy” rating in a report on Monday, March 19th. Zacks Investment Research raised Woodward, Inc.Common Stock from a “hold” rating to a “buy” rating and set a $84.00 price target on the stock in a report on Friday, April 20th. Finally, Barclays began coverage on Woodward, Inc.Common Stock in a report on Thursday, March 29th. They set an “equal weight” rating and a $81.00 price target on the stock. Nine equities research analysts have rated the stock with a hold rating and four have issued a buy rating to the company’s stock. Woodward, Inc.Common Stock presently has a consensus rating of “Hold” and an average target price of $79.40.

In related news, insider Chad Robert Preiss sold 7,000 shares of Woodward, Inc.Common Stock stock in a transaction dated Monday, May 21st. The stock was sold at an average price of $76.22, for a total value of $533,540.00. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. Also, insider Matthew Freeman Taylor sold 4,000 shares of Woodward, Inc.Common Stock stock in a transaction dated Thursday, April 26th. The stock was sold at an average price of $73.25, for a total value of $293,000.00. Following the completion of the transaction, the insider now owns 8,297 shares of the company’s stock, valued at approximately $607,755.25. The disclosure for this sale can be found here. Insiders sold 95,200 shares of company stock worth $7,022,692 over the last ninety days. Insiders own 6.17% of the company’s stock.

A number of institutional investors and hedge funds have recently added to or reduced their stakes in the stock. Schwab Charles Investment Management Inc. boosted its position in shares of Woodward, Inc.Common Stock by 4.3% during the fourth quarter. Schwab Charles Investment Management Inc. now owns 447,740 shares of the technology company’s stock valued at $34,271,000 after buying an additional 18,530 shares during the period. SG Americas Securities LLC boosted its position in shares of Woodward, Inc.Common Stock by 617.4% during the fourth quarter. SG Americas Securities LLC now owns 12,921 shares of the technology company’s stock valued at $989,000 after buying an additional 11,120 shares during the period. Zurcher Kantonalbank Zurich Cantonalbank boosted its position in shares of Woodward, Inc.Common Stock by 49.9% during the fourth quarter. Zurcher Kantonalbank Zurich Cantonalbank now owns 3,282 shares of the technology company’s stock valued at $251,000 after buying an additional 1,092 shares during the period. Victory Capital Management Inc. boosted its position in shares of Woodward, Inc.Common Stock by 1.4% during the fourth quarter. Victory Capital Management Inc. now owns 617,067 shares of the technology company’s stock valued at $47,230,000 after buying an additional 8,555 shares during the period. Finally, Kovack Advisors Inc. purchased a new position in shares of Woodward, Inc.Common Stock during the fourth quarter valued at approximately $260,000. Institutional investors own 72.56% of the company’s stock.

Woodward, Inc.Common Stock stock traded up $1.00 during trading on Monday, reaching $79.03. The company had a trading volume of 241,293 shares, compared to its average volume of 181,530. The company has a debt-to-equity ratio of 0.40, a quick ratio of 1.48 and a current ratio of 2.92. The stock has a market cap of $4.80 billion, a P/E ratio of 25.01, a P/E/G ratio of 1.80 and a beta of 1.24. Woodward, Inc.Common Stock has a 52 week low of $65.76 and a 52 week high of $89.30.

The company also recently announced a quarterly dividend, which was paid on Monday, June 4th. Stockholders of record on Monday, May 21st were issued a $0.142 dividend. The ex-dividend date was Friday, May 18th. This represents a $0.57 annualized dividend and a dividend yield of 0.72%. Woodward, Inc.Common Stock’s dividend payout ratio (DPR) is 18.04%.

About Woodward, Inc.Common Stock

Woodward, Inc designs, manufactures, and services energy control and optimization solutions for the aerospace and industrial markets worldwide. Its Aerospace segment provides fuel pumps, metering units, actuators, air valves, specialty valves, fuel nozzles, and thrust reverser actuation systems for turbine engines and nacelles; and flight deck controls, actuators, servocontrols, motors, and sensors for aircraft that are used on commercial and private aircrafts and rotorcrafts, as well as in military fixed-wing aircrafts and rotorcrafts, weapons, and defense systems.

Get a free copy of the Zacks research report on Woodward, Inc.Common Stock (WWD)

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Earnings History and Estimates for Woodward, Inc.Common Stock (NASDAQ:WWD)

Peabody Energy (BTU) Rating Increased to Strong-Buy at Zacks Investment Research

Peabody Energy (NYSE:BTU) was upgraded by Zacks Investment Research from a “hold” rating to a “strong-buy” rating in a report issued on Friday. The brokerage currently has a $54.00 price objective on the coal producer’s stock. Zacks Investment Research‘s price target suggests a potential upside of 15.24% from the company’s current price.

According to Zacks, “Peabody Energy Corporation is a coal company. It provides voice in advocating for sustainable mining, energy access and clean coal technologies. The company serves metallurgical and thermal coal customers primarily in Arizona, Colorado, New Mexico and Wyoming, Illinois, Indiana and Australia. Peabody Energy Corporation is based in St Louis, United States. “

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BTU has been the topic of several other research reports. JPMorgan Chase & Co. reaffirmed an “overweight” rating and set a $48.00 price objective (down previously from $52.00) on shares of Peabody Energy in a report on Friday, March 16th. MKM Partners reaffirmed a “buy” rating and set a $53.00 price objective on shares of Peabody Energy in a report on Wednesday. Three analysts have rated the stock with a hold rating, seven have assigned a buy rating and one has assigned a strong buy rating to the company’s stock. Peabody Energy has a consensus rating of “Buy” and a consensus price target of $45.00.

Shares of Peabody Energy traded down $0.02, hitting $46.86, during mid-day trading on Friday, Marketbeat.com reports. 863,000 shares of the stock were exchanged, compared to its average volume of 1,166,710. The firm has a market cap of $5.87 billion, a price-to-earnings ratio of 12.79 and a beta of 1.42. Peabody Energy has a 12-month low of $22.58 and a 12-month high of $47.84. The company has a debt-to-equity ratio of 0.37, a quick ratio of 2.02 and a current ratio of 2.25.

Peabody Energy (NYSE:BTU) last issued its quarterly earnings data on Wednesday, April 25th. The coal producer reported $0.83 earnings per share (EPS) for the quarter, missing the consensus estimate of $0.84 by ($0.01). The firm had revenue of $1.46 billion for the quarter, compared to analysts’ expectations of $1.37 billion. Peabody Energy had a return on equity of 26.49% and a net margin of 15.59%. The business’s revenue for the quarter was up 10.3% compared to the same quarter last year. During the same period in the previous year, the business posted $6.80 EPS. research analysts predict that Peabody Energy will post 3.35 EPS for the current year.

In other news, CFO Amy B. Schwetz sold 933 shares of the stock in a transaction dated Wednesday, April 4th. The shares were sold at an average price of $36.92, for a total transaction of $34,446.36. Following the completion of the sale, the chief financial officer now owns 215,419 shares in the company, valued at $7,953,269.48. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available through this link. Also, insider Kemal Williamson sold 1,461 shares of the firm’s stock in a transaction dated Wednesday, April 4th. The shares were sold at an average price of $36.92, for a total transaction of $53,940.12. Following the completion of the sale, the insider now owns 205,386 shares of the company’s stock, valued at approximately $7,582,851.12. The disclosure for this sale can be found here. Insiders have sold 3,519 shares of company stock valued at $129,921 in the last quarter. Insiders own 0.42% of the company’s stock.

A number of large investors have recently made changes to their positions in BTU. SG Americas Securities LLC acquired a new stake in Peabody Energy in the fourth quarter valued at about $110,000. Meeder Asset Management Inc. lifted its position in Peabody Energy by 147.2% in the fourth quarter. Meeder Asset Management Inc. now owns 3,624 shares of the coal producer’s stock valued at $142,000 after purchasing an additional 2,158 shares during the period. Asset Management One Co. Ltd. acquired a new stake in Peabody Energy in the first quarter valued at about $178,000. Zurcher Kantonalbank Zurich Cantonalbank acquired a new stake in Peabody Energy in the fourth quarter valued at about $179,000. Finally, OMERS ADMINISTRATION Corp acquired a new stake in Peabody Energy in the first quarter valued at about $226,000.

Peabody Energy Company Profile

Peabody Energy Corporation engages in coal mining business. The company operates through six segments: Powder River Basin Mining, Midwestern U.S. Mining, Western U.S. Mining, Australian Metallurgical Mining, Australian Thermal Mining, and Trading and Brokerage. It is involved in mining, preparation, and sale of thermal coal primarily to electric utilities; and metallurgical coal that include hard coking coal, semi-hard coking coal, semi-soft coking coal, and low-volatile pulverized coal injection for industrial customers.

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Analyst Recommendations for Peabody Energy (NYSE:BTU)

Has A New Advaxis Awakened Out Of The Doldrums?

Author’s note: Subscribers to the Total Pharma Tracker gained early access to this article.

Another quarter, another Advaxis (ADXS) analysis. Looking at the chart for the entire year so far, you could perhaps be forgiven in forgetting that anything happened at all aside from the dilutive secondary offering:

Chart
ADXS data by YCharts

This persistent decline is in spite of historic accomplishments for the company, such as filing their application with the European Medicines Agency seeking conditional approval for axalimogene filolisbac.

Now, we have the first quarterly filing under the new management of Ken Berlin and CFO Molly Henderson. And this team is shaking things up strongly on the financial and clinical ends for ADXS. This article is going to provide you with all the major updates you need to have a current picture of due diligence on ADXS, as well as how it is shaping up into 2019.

Momentous events – a supposedly catastrophic clinical hold

The last business update we got from ADXS was coupled with the decidedly bad news that their phase 1/2 study combining the HPV-targeted Listeria-based immunotherapy axalimogene filolisbac and AstraZeneca’s (AZN) durvalumab was halted. This followed the submission of a safety report showing that a patient died while receiving treatment due to respiratory failure.

That hold remains in place as I write this, and the company guided as part of their most recent update that they are planning a submission to the FDA in conjunction with AZN to get this trial started again. It remains my personal belief that this patient death, tragic though it was, was not likely due to treatment with axalimogene filolisbac. I expect it will be shown to have been a complication of her late-stage cancer.

But that’s not the important part. It is clear that this trial is not a high priority for either AZN or ADXS at this time, and it does not hold much bearing on the progress of axalimogene filolisbac or ADXS’s other programs.

Preclinical advances at AACR

At the American Association for Cancer Research Annual Meeting, ADXS presented studies detailing for the first time their preclinical efforts with the ADXS-HOT program. ADXS-HOT is a neoantigen immunotherapy program that is designed to be specific to classes of tumor. It accomplishes this by priming the immune system to recognize antigens associated with “hotspot” mutations that crop up routinely in certain forms of cancer.

We learned that ADXS-HOT was able to promote an antitumor immune response in mouse models of cancer, particularly those associated with aberrant Ras signaling. Given the importance of RAS mutations in various human cancers, this kind of finding has important implications. ADXS guided in its Q2 business update that they would be submitting the first INDs to begin phase 1 study, with timelines placing early data reports coming as early as 2019. I won’t bet the house on seeing momentous data before cash runs out (more on that below), but ADXS-HOT has shown serious potential, and it remains ADXS’s program with the most value, since it has not yet been sold to a bigger company.

ADXS-NEO, on the other hand, has. But it’s also much further along. We saw preclinical findings at AACR for this program, as well. While ADXS-HOT is designed to be “off the shelf” and specific to broad classes of tumor, ADXS-NEO is the company’s personalized medicine approach to immunotherapy. Importantly, ADXS-NEO demonstrated the ability to elicit an immune response against antigens not predicted to be immunogenic:

From ADXS’s AACR presentation. Lm19 is the strain harboring “non-immunogenic” antigens. Lm20 is the strain harboring expected “immunogenic” antigens

In all, this is the first sign that using the Listeria delivery vector is a difference maker in terms of antigen vehicles. Why is this important? Consider the AACR presentation of ADXS competitor Genocea, who detailed findings showing the unpredictability of neoantigens predicted by computer algorithms. They were able to show that they could find neoantigens not predicted by the models. More importantly for ADXS, they showed that there were neoantigens identified by the computer that did not promote a tumor response.

But if this is due to relative “non-immunogenicity” of these particular antigens, then ADXS has evidence that using Listeria can overcome this challenge, possibly obviating the issues that are going to be faced by the neoantigen-based personal immunotherapy field in the near future. If ADXS can use the Listeria vector to sidestep the challenges posed for competitors like Neon Therapeutics, it could be a major boon in terms of efficacy. Considering Neon is about to enter the public trading market and are already in phase 1 trials, ADXS needs all the edge it can get moving forward.

The only ADXS show at ASCO 2018 – Prostate cancer

Instead of a further update on their HPV programs, ADXS’s only data for Listeria-based immunotherapy came in the form of a poster with their collaborator Merck (MRK). KEYNOTE-046 randomized patients to receive either ADXS-PSA (a Listeria vector delivering anti-PSA antigens to promote a prostate cancer immune response) or the combination of ADXS-PSA and the anti-PD-1 antibody pembrolizumab.

The clearest finding from the study was that the combination was well tolerated, and that ADXS-PSA/pembrolizumab led to better reductions in PSA than did the Listeria vector therapy alone. But the number of patients was not incredibly high. Moreover, MRK is threatening to overshadow this KEYNOTE study with a larger one, KEYNOTE-199.

This was the first reasonably powered study to show some kind of benefit for pembrolizumab in prostate cancer. A comparison of the two studies would be beyond the scope of this particular article focusing on ADXS prospects, so you can read more about how KEYNOTE-046 and KEYNOTE-199 compare here.

Long story short: it looks a bit like the ADXS-PSA/pembrolizumab combo might be working better for patients, who also happen to seem to be in worse condition than those in KEYNOTE-199. But it’s very preliminary to make stark comparisons here, given information that was not reported.

Furthermore, ADXS guided that they were encouraged by these data, and they will continue to follow the patients for another 6 months or so before evaluating the long-term value and viability of this program.

Financial Outlook

ADXS has made good headway, in spite of the relatively myopic hemming and hawing from the daily share price-obsessed investors. But for a clinical-stage biotech, cash is king. And ADXS has not been in an extremely strong position for years now. Where do they stand now as the new CEO’s tenure begins?

Following a secondary offering back in February that netted around $20 million in funding, ADXS’s cash position stands stronger than it did at the end of Q1, despite a still-high loss from operations of $21 million. Furthermore, in their most recent financial update, ADXS announced that they were slashing their workforce by 24%, with an anticipating a cash burn reduction to $50 million annually.

The math, then, is simple. With their cash on hand and short-term investments, ADXS has approximately one year and one half of a quarter of funding left. By selling stock on the open market (as they did in the first quarter for a few million dollars more), they may be able to reasonably bring this cash runway out to one year and one fiscal quarter from April 30.

The clock is ticking, and that clock says that if nothing changes, the funding runs out in December 2019 in the best-case scenario, but more like June/July 2019 if their losses are not as well controlled as they say. Needless to say, cash is not ADXS’s biggest strength moving forward, and this kind of weakness has been a huge drag on the share price and their ability to raise new funds.

Extant sources of income

Shareholders have been held largely in the dark about the developmental milestones that ADXS is entitled to from both the Aratana (PETX) and Amgen (AMGN) partnerships. On one hand, PETX recently secured conditional approval for their licensed Listeria-based canine osteosarcoma treatment. Under the original terms of their agreement, PETX is on the hook for upwards of $28 million in milestones, although it is unclear exactly when those will be realized.

In addition, the AMGN partnership is capable of generating much larger returns for ADXS. One expected (though not confirmed) milestone will be for the official start of clinical study. To date, however, no patients have been dosed with ADXS-NEO. This is looking to change in the near future, as the study is set to begin in June 2018, per the Q2 filing. And this was all but confirmed by the company’s new CEO, Andres Gutierrez, in the conference call that followed:

As you know, Advaxis-NEO is partnered with Amgen, dosing for the first patient is imminent and we are working to enroll additional patients on this study with four sites and growing as of today.

We do not know whether this dosing will trigger a clinical milestone payment from Amgen, or how large it will be. There is some speculation that it could be in the tens of millions of dollars, but I think this is optimistic. However, it should be noted at any amount of money coming from AMGN support at this juncture will help to stave off the bleeding and increase the runway.

Potential sources of income

Dilution is the most obvious well that ADXS can dip into, as their last round of dilution, which added around 20% to the outstanding shares, has led to an approximately 10% decrease in the market cap of the company since that deal went through. So, like it or not, ADXS has proven resilient in spite of the dilutive funding arrangements.

Of course, that is no guarantee that another deal would go remotely smoothly for the company, and at the time I write this their total valuation is just barely reaching to $100 million. This is not a favorable position to be undertaking another secondary offering anytime in the near future.

Given their now-public intention to partner axalimogene filolisbac, this could be a likely source of upfront money, in addition to royalty income should the drug be approved. A prototype arrangement that we can draw from might be Aveo Pharmaceuticals (AVEO), who outlicensed their kidney cancer drug tivozanib to EUSA for up to $400 million in milestones, with a $2.5 million upfront payment.

Because ADXS currently has a submission with the EMA, it might be reasonable to expect that they can secure higher upfront funding. But it gives us a way to ballpark what we might expect from a Europe-only deal. Given the size of the competitive market for AVEO’s drug, it is analogous, in my mind, to the revenue potential that ADXS could see for a relatively rare disease setting, even though it remains a pretty strong unmet need.

Of course, no new partnership is a guarantee for ADXS. This is an unusual drug that has not yet realized the full validation it needs to warrant what I would consider guaranteed acceptance by the regulators. So if other pharmaceutical and biotech companies don’t want to touch it at this time, that may just be how it is. But the new management is signaling that all offers are on the table, and pipe dreams of partnering the European end of axalimogene filolisbac for billions of dollars do not seem to be on the forefront of managements’ minds.

Strengths and Weaknesses

ADXS continues to set itself apart from its immunotherapy peers with their promising Listeria-based delivery vector. None of the recent data presentations give me strong reason to feel that they are in dire straits as far as the science goes. Therefore, I consider the science of ADXS a strength. But that’s a tentative consideration. Remember, due to the areas they’re tackling, we don’t have any placebo-controlled data to demonstrate a clear benefit for any of their therapies.

This is an aspect of ADXS I covered in a good bit more detail in a previous article that I highly recommend you read: “What Can the EMA’s Failures Tell Us About the Future?” I am optimistic, but at the same time I am realistic. I am a fan of ADXS’s approach, but I am not an absolute cheerleader who will tell you that the Listeria vector has already demonstrated transformational benefit for patients. But it’s still a strength, in my book. And I peg the chances that they’ll get that EMA approval at around 70%-80%, given what I’ve seen from other programs that received conditional approval.

In addition, the company is on the cusp of exploring some very special science in the clinic, with imminent dosing of patients beginning for ADXS-NEO and INDs being planned for later this year. This kind of development provides more support for my optimism.

But to be frank? Cash doesn’t. Their cash position is a notable weakness for the company, since there is no guarantee that they will be able to execute a partnership that removes this as a going concern. And unfortunately, ADXS finds itself in a position where it needs the cash badly enough that they may find themselves in a weak stance. At these price levels, another secondary offering could represent an existential crisis for current shareholders.

However, there are a lot of things that can quickly turn that perception around. A good milestone payment. A modest, but cash-frontloaded deal for axalimogene filolisbac, or lucrative partnerships for programs like ADXS-HOT or ADXS-PSA would almost immediately erase the funding concerns for years, without the need to reach into the shareholder equity well.

Conclusions

ADXS is not a company for the shortsighted investor. Expecting a turnaround on a dime is simple speculation, and it is more likely than not to put some pain in your wallet, not gains. I continue to feel that the risk-benefit for ADXS is outsized, just as I did when they were at $6 per share. There’s just too much developing for the company to be ignored at this juncture.

With definitive, clear leadership running the show now, and with an apparent plan to try and resolve their cash flow problems, ADXS may find itself in its best position ever in the coming months if they can execute. And if that’s the case then this trading in the $1.60-$1.90 is going to be a distant memory pretty dang quickly.

Disclosure: I am/we are long ADXS.

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.

Better Buy: Enbridge Inc vs. Kinder Morgan, Inc.

One of the most underappreciated trends of the last several years is also one of the most important for shaking up global trade and security: The United States will become a net energy exporter as soon as 2020. Perhaps people are still picking their jaws off the floor as they process the country’s overnight ascension up the energy rankings. After all, less than two decades ago, any argument that achieving energy independence was possible in such a short time frame could have been laughed out of the room.

But energy security is a slam-dunk (the United States is already a net exporter of natural gas), especially when broadening the scope to include all of North America, and it represents an amazing source of opportunities for long-term investors.

Some of the most obvious companies to focus on are pipeline operators. They provide the infrastructure allowing energy production to make it from field to processing terminal to refinery to export facility. Plus, the fee-based businesses provide gobs of cash flow and predictable operations for shareholders. And two of the most obvious pipeline operators to focus on are Kinder Morgan (NYSE:KMI) and Enbridge (NYSE:ENB). Which of these stocks is the better buy?

Two businessmen playing tug-of-war with a large rope.

Image source: Getty Images.

The matchup

The share price may not reflect it, but Kinder Morgan has been on a roll lately. North America’s leading pipeline manager made good on its promise to boost the distribution 60% in 2018. It also swiped away one of the largest sources of uncertainty facing its growth prospects: the severely delayed Trans Mountain Pipeline that will prove critical to exporting crude oil from Canada’s western coast.

Part of the reason the project was delayed is that it faced significant pushback from environmental groups, so Canada swooped in to acquire the pipeline for $3.5 billion and ensure its completion. Cash is good, but the Trans Mountain Pipeline comprised the bulk of Kinder Morgan’s future earnings growth in the backlog. What happens now? The pipeline operator is working on a slew of smaller but valuable growth projects and should deliver a more concrete plan on the post-Canada expansion strategy to shareholders soon.

While that could change previously disclosed expectations for how capital will be deployed, the core business is still poised to deliver strong results in 2018. Kinder Morgan previously expected to maintain a net debt to adjusted EBITDA ratio of 5.1 and generate $568 million in discounted cash flow after paying for growth projects.

Losing the Trans Mountain Pipeline could have an effect in the long term, though. Kinder Morgan intends to grow its dividend 25% annually through 2020. That would represent a dividend yield of 7.4% at the current share price. There’s also $1.5 billion remaining on a $2 billion share repurchase program. Whether or not smaller growth projects — or a big splash acquisition — can replace the $850-million-per-year earnings boost expected from the Canadian pipeline extension and deliver on previously stated goals in the same time frame remains to be seen.

A pipeline splitting a mountain valley.

Image source: Getty Images.

Enbridge is similarly well-positioned to capitalize on booming energy production and exports in North America. The Canadian pipeline operator generates 96% of all revenue in fee-based contracts and pays out 65% of income streams to shareholders, which leaves ample cash flow for capital investments. In the first quarter of 2018, that amounted to $2.3 billion in distributable cash flow, only $860 million of which was needed to fund the quarterly payout.

That’s good news because Enbridge has $16.9 billion in growth projects stuffed in its backlog that need financing. If the business continues to execute and build out infrastructure, then it could grow cash flow per share and its dividend 10% per year through 2020. Management is also poking around several potential growth projects that could fuel growth beyond 2020.

That said, the Canadian pipeline operator faces its own sources of strategic uncertainty. The company recently offered $8.86 billion to acquire the outstanding shares of its four subsidiaries in a stock-for-stock transaction. Enbridge may have to pony up a bit more to get the deals approved by each company’s board, as the offer doesn’t represent a premium to current share prices. In the long run, the mammoth deal makes sense, as the tax advantages of master limited partnerships have evaporated with new corporate tax rates and regulatory decisions. In the near term, there are some unanswered questions.

One of the more important questions is how the company will make good on its promise to deleverage the balance sheet. The business’s relatively high level of debt has been a primary factor driving down the share price in the last year, which has ironically made Enbridge stock pretty cheap on a cash flow basis. In addition to asset sales that have already been named, one move that could be announced in 2018 is the sale of its midstream business, which it’s looking to unload for around $3.5 billion. Perhaps unsurprisingly, Kinder Morgan’s Canadian subsidiary is a prime candidate, especially after receiving a $3.5 billion windfall for its Trans Mountain Pipeline, which it will be keen to replace with new income streams.

Oil pipeline running into a refinery.

Image source: Getty Images.

By the numbers

Both Kinder Morgan and Enbridge face uncertainty in their near-term strategies. While that has weighed on each pipeline stock in 2018, the underlying businesses remain strong and predictable. How do they compare on selected financial metrics?

Metric

Kinder Morgan

Enbridge

Market cap

$37.3 billion

$53.3 billion

Dividend yield

5%

6.5%

Forward PE

17.8

17.0

EV to EBITDA

12.6

13.3

Data source: Yahoo! Finance.

The table above is too close to call. However, Enbridge’s 6.5% dividend yield does stand out, especially if it can make good on its promise to grow the payout at a 10% annual clip for the next few years.

A laptop on a table with a petrochemical complex in the background.

Image source: Getty Images.

The better buy is…

Both pipeline operators are solid investments for long-term investors. Kinder Morgan and Enbridge each offer a stable and predictable business, steady growth, and a way for investors to own an important global trend. Forced to choose just one, the better buy would be Enbridge.

It owns a massive backlog of growth projects ($16.9 billion) compared to its smaller peer ($5 billion). A combination of strong cash flow and non-core asset sales should allow the company to self-fund a healthy amount of the capital requirements. While there are questions regarding its proposed acquisition of its subsidiaries, Enbridge stock’s nearly 20% slide in 2018 presents a better buying opportunity for investors.