Financial Survey: Enbridge (ENB) vs. Pembina Pipeline Corp. (PBA)
Pembina Pipeline Corp. (NYSE: PBA) and Enbridge (NYSE:ENB) are both large-cap oils/energy companies, but which is the better business? We will contrast the two companies based on the strength of their valuation, profitabiliy, risk, analyst recommendations, dividends, earnings and institutional ownership.
Institutional and Insider Ownership
45.9% of Pembina Pipeline Corp. shares are held by institutional investors. Comparatively, 62.9% of Enbridge shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Valuation and Earnings
This table compares Pembina Pipeline Corp. and Enbridge’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Pembina Pipeline Corp.||$3.51 billion||3.77||$937.28 million||$0.97||34.04|
|Enbridge||$27.39 billion||2.31||$4.68 billion||$0.86||44.94|
Enbridge has higher revenue and earnings than Pembina Pipeline Corp.. Pembina Pipeline Corp. is trading at a lower price-to-earnings ratio than Enbridge, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of recent ratings and recommmendations for Pembina Pipeline Corp. and Enbridge, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Pembina Pipeline Corp.||0||1||9||0||2.90|
Pembina Pipeline Corp. presently has a consensus target price of $45.00, indicating a potential upside of 36.28%. Enbridge has a consensus target price of $56.13, indicating a potential upside of 45.21%. Given Enbridge’s higher possible upside, analysts clearly believe Enbridge is more favorable than Pembina Pipeline Corp..
Volatility and Risk
Pembina Pipeline Corp. has a beta of 0.67, meaning that its stock price is 33% less volatile than the S&P 500. Comparatively, Enbridge has a beta of 0.61, meaning that its stock price is 39% less volatile than the S&P 500.
This table compares Pembina Pipeline Corp. and Enbridge’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Pembina Pipeline Corp.||12.23%||8.49%||3.89%|
Pembina Pipeline Corp. pays an annual dividend of $1.49 per share and has a dividend yield of 4.5%. Enbridge pays an annual dividend of $1.79 per share and has a dividend yield of 4.6%. Pembina Pipeline Corp. pays out 153.6% 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 208.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Enbridge has raised its dividend for 5 consecutive years. Enbridge is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Pembina Pipeline Corp. beats Enbridge on 10 of the 16 factors compared between the two stocks.
Pembina Pipeline Corp. Company Profile
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.
Enbridge Company Profile
Enbridge Inc. is a Canada-based energy transportation and distribution company. The Company is engaged in delivering energy. It operates through five segments: Liquids Pipelines, Gas Distribution, Gas Pipelines and Processing, Green Power and Transmission, and Energy Services. Liquids Pipelines consists of common carrier and contract crude oil, natural gas liquids (NGL), and refined products pipelines and terminals, including Canadian Mainline, Lakehead Pipeline System, Mid-Continent and Gulf Coast and Regional Oil Sands System. Gas Distribution consists of its natural gas utility operations, the core of which is Enbridge Gas Distribution Inc. Green Power and Transmission consists of its investments in renewable energy assets and transmission facilities. Renewable energy assets consist of wind, solar, geothermal and waste heat recovery facilities in Canada. Energy Services undertake physical commodity marketing activity and logistical services, and oversee refinery supply services.
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