Critical Review: Pembina Pipeline Corp. (PBA) vs. Penntex Midstream Partners (PTXP)
Pembina Pipeline Corp. (NYSE: PBA) and Penntex Midstream Partners (NASDAQ:PTXP) are both oils/energy companies, but which is the superior stock? We will compare the two companies based on the strength of their risk, earnings, dividends, institutional ownership, valuation, profitability and analyst recommendations.
Pembina Pipeline Corp. pays an annual dividend of $1.63 per share and has a dividend yield of 4.8%. Penntex Midstream Partners pays an annual dividend of $1.18 per share and has a dividend yield of 5.9%. Pembina Pipeline Corp. pays out 168.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Penntex Midstream Partners pays out 472.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
This table compares Pembina Pipeline Corp. and Penntex Midstream Partners’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Pembina Pipeline Corp.||12.12%||8.60%||3.85%|
|Penntex Midstream Partners||34.54%||11.00%||5.81%|
This is a breakdown of current ratings and target prices for Pembina Pipeline Corp. and Penntex Midstream Partners, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Pembina Pipeline Corp.||0||0||7||0||3.00|
|Penntex Midstream Partners||0||6||1||0||2.14|
Pembina Pipeline Corp. currently has a consensus price target of $45.00, indicating a potential upside of 32.08%. Penntex Midstream Partners has a consensus price target of $19.17, indicating a potential downside of 4.12%. Given Pembina Pipeline Corp.’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Pembina Pipeline Corp. is more favorable than Penntex Midstream Partners.
Institutional and Insider Ownership
49.9% of Pembina Pipeline Corp. shares are owned by institutional investors. Comparatively, 55.0% of Penntex Midstream Partners shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Earnings & Valuation
This table compares Pembina Pipeline Corp. and Penntex Midstream Partners’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Pembina Pipeline Corp.||$4.01 billion||3.42||$1.06 billion||$0.97||35.12|
|Penntex Midstream Partners||N/A||N/A||N/A||$0.25||79.96|
Pembina Pipeline Corp. has higher revenue and earnings than Penntex Midstream Partners. Pembina Pipeline Corp. is trading at a lower price-to-earnings ratio than Penntex Midstream Partners, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Pembina Pipeline Corp. has a beta of 0.73, suggesting that its stock price is 27% less volatile than the S&P 500. Comparatively, Penntex Midstream Partners has a beta of 1, suggesting that its stock price has a similar volatility profile to the S&P 500.
About Pembina Pipeline Corp.
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.
About Penntex Midstream Partners
PennTex Midstream Partners, LP, focuses on owning, operating, acquiring and developing midstream energy infrastructure assets in North America. The Company owns and operates midstream gathering, processing and transportation assets in northern Louisiana. The Company provides natural gas gathering and processing and residue gas and natural gas liquid (NGL) transportation services to producers focused on the Cotton Valley formation in northern Louisiana. The Company’s assets primarily consisted of natural gas gathering pipeline, two 200 million cubic feet per day (MMcf/d) design-capacity cryogenic natural gas processing plants, and residue gas and NGL transportation pipelines, as of December 31, 2016. In addition to providing midstream services to its primary customer with its existing assets, the Company pursues other opportunities for organic development and growth as producers in its region continue to develop their acreage.
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