Pembina Pipeline (NYSE: PBA) and Mplx (NYSE:MPLX) are both large-cap oils/energy companies, but which is the superior business? We will compare the two companies based on the strength of their risk, valuation, analyst recommendations, dividends, earnings, institutional ownership and profitability.
This is a breakdown of recent recommendations for Pembina Pipeline and Mplx, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Mplx has a consensus target price of $41.70, indicating a potential upside of 19.52%. Given Mplx’s higher possible upside, analysts plainly believe Mplx is more favorable than Pembina Pipeline.
Institutional & Insider Ownership
47.2% of Pembina Pipeline shares are held by institutional investors. Comparatively, 62.3% of Mplx shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Risk & Volatility
Pembina Pipeline has a beta of 0.66, suggesting that its share price is 34% less volatile than the S&P 500. Comparatively, Mplx has a beta of 1.32, suggesting that its share price is 32% more volatile than the S&P 500.
Valuation and Earnings
This table compares Pembina Pipeline and Mplx’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Pembina Pipeline||$3.22 billion||5.24||$351.92 million||$1.42||23.64|
|Mplx||$3.87 billion||7.16||$794.00 million||$1.05||33.23|
Mplx has higher revenue and earnings than Pembina Pipeline. Pembina Pipeline is trading at a lower price-to-earnings ratio than Mplx, indicating that it is currently the more affordable of the two stocks.
This table compares Pembina Pipeline and Mplx’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Pembina Pipeline pays an annual dividend of $1.72 per share and has a dividend yield of 5.1%. Mplx pays an annual dividend of $2.43 per share and has a dividend yield of 7.0%. Pembina Pipeline pays out 121.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Mplx pays out 231.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Pembina Pipeline has increased its dividend for 2 consecutive years and Mplx has increased its dividend for 4 consecutive years. Mplx is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Mplx beats Pembina Pipeline on 11 of the 16 factors compared between the two stocks.
About Pembina Pipeline
Pembina Pipeline Corporation is an energy transportation and service provider. The Company operates through four segments. The Conventional Pipelines segment consists of the tariff-based operations of pipelines and related facilities to deliver crude oil, condensate and natural gas liquids (NGL) in Alberta, British Columbia, Saskatchewan, and North Dakota, United States. The Oil Sands & Heavy Oil segment consists of the Syncrude, Horizon, Nipisi and Mitsue Pipelines, and the Cheecham Lateral. These pipelines and related facilities deliver synthetic crude oil produced from oil sands under long-term cost-of-service arrangements. The Gas Services segment consists of natural gas gathering and processing facilities. The Midstream segment consists of the Company’s interests in extraction and fractionation facilities, terminalling and storage hub services under a mixture of short, medium and long-term contractual arrangements.
MPLX LP is a master limited partnership (MLP) formed by Marathon Petroleum Corporation (MPC) to own, operate, develop and acquire midstream energy infrastructure assets. The Company is engaged in the gathering, processing and transportation of natural gas; the gathering, transportation, fractionation, storage and marketing of natural gas liquids (NGLs), and the gathering, transportation and storage of crude oil and refined petroleum products. Its segments are Logistics and Storage (L&S), and Gathering and Processing (G&P). The L&S segment includes transportation and storage of crude oil, refined products and other hydrocarbon-based products. As of December 31, 2016, the G&P segment operated various natural gas gathering systems that had a combined 5,439 million cubic feet per day (mmcf/d) throughput capacity. As of December 31, 2016, its assets included infrastructure to support MPC, including approximately 2,900 miles of crude oil and refined product pipelines across nine states.
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