Which is more compelling pick right now? – Energy Transfer Partners, L.P. (ETP), Sysco Corporation (SYY)

The shares of Energy Transfer Partners, L.P. have increased by more than 0.78% this year alone. The shares recently went down by -0.44% or -$0.08 and now trades at $18.06. The shares of Sysco Corporation (NYSE:SYY), has jumped by 3.42% year to date as of 05/02/2018. The shares currently trade at $62.81 and have been able to report a change of 0.58% over the past one week.

The stock of Energy Transfer Partners, L.P. and Sysco Corporation were two of the most active stocks on Wedday. Investors seem to be very interested in what happens to the stocks of these two companies but do investors favor one over the other? We will analyze the growth, profitability, risk, valuation, and insider trends of both companies and see which one investors prefer.

Profitability and Returns

Growth alone cannot be used to see if the company will be valuable. Shareholders will be the losers if a company invest in ventures that aren’t profitable enough to support upbeat growth. In order for us to accurately measure profitability and return, we will be using the EBITDA margin and Return on Investment (ROI), which balances the difference in capital structure. ETP has an EBITDA margin of 19.31%, this implies that the underlying business of ETP is more profitable. The ROI of ETP is 3.30% while that of SYY is 13.50%. These figures suggest that SYY ventures generate a higher ROI than that of ETP.

Cash Flow

The value of a stock is ultimately determined by the amount of cash flow that the investors have available. Over the last 12 months, ETP’s free cash flow per share is a negative -6.57, while that of SYY is positive 0.99.

Liquidity and Financial Risk

The ability of a company to meet up with its short-term obligations and be able to clear its longer-term debts is measured using Liquidity and leverage ratios. The current ratio for ETP is 0.90 and that of SYY is 1.40. This implies that it is easier for ETP to cover its immediate obligations over the next 12 months than SYY. The debt ratio of ETP is 1.25 compared to 3.90 for SYY. SYY can be able to settle its long-term debts and thus is a lower financial risk than ETP.


ETP currently trades at a forward P/E of 14.11, a P/B of 0.79, and a P/S of 0.73 while SYY trades at a forward P/E of 17.93, a P/B of 14.44, and a P/S of 0.57. This means that looking at the earnings, book values and sales basis, ETP is the cheaper one. It is very obvious that earnings are the most important factors to investors, thus analysts are most likely to place their bet on the P/E.

Analyst Price Targets and Opinions

The mistake some people make is that they think a cheap stock has more value to it. In order to know the value of a stock, there is need to compare its current price to its likely trading price in the future. The price of ETP is currently at a -24.91% to its one-year price target of 24.05. Looking at its rival pricing, SYY is at a -5.28% relative to its price target of 66.31.

When looking at the investment recommendation on say a scale of 1 to 5 (1 being a strong buy, 3 a hold, and 5 a sell), ETP is given a 1.80 while 2.40 placed for SYY. This means that analysts are more bullish on the outlook for SYY stocks.

Insider Activity and Investor Sentiment

Short interest or otherwise called the percentage of a stock’s tradable shares currently being shorted is another data that investors use to get a handle on sentiment. The short ratio for ETP is 2.51 while that of SYY is just 5.30. This means that analysts are more bullish on the forecast for ETP stock.


The stock of Energy Transfer Partners, L.P. defeats that of Sysco Corporation when the two are compared, with ETP taking 7 out of the total factors that were been considered. ETP happens to be more profitable, generates a higher ROI, has higher cash flow per share, higher liquidity and has a lower financial risk. When looking at the stock valuation, ETP is the cheaper one on an earnings, book value and sales basis. Finally, the sentiment signal for ETP is better on when it is viewed on short interest.

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