Plains Group Holdings, L.P. (NYSE: PAGP) and Penntex Midstream Partners (NASDAQ:PTXP) are both oils/energy companies, but which is the better investment? We will compare the two companies based on the strength of their dividends, risk, institutional ownership, earnings, analyst recommendations, profitability and valuation.
This is a summary of recent recommendations and price targets for Plains Group Holdings, L.P. and Penntex Midstream Partners, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Plains Group Holdings, L.P.||0||9||9||0||2.50|
|Penntex Midstream Partners||0||6||1||0||2.14|
Plains Group Holdings, L.P. presently has a consensus price target of $27.50, indicating a potential upside of 20.56%. Penntex Midstream Partners has a consensus price target of $19.17, indicating a potential downside of 4.12%. Given Plains Group Holdings, L.P.’s stronger consensus rating and higher possible upside, equities analysts clearly believe Plains Group Holdings, L.P. is more favorable than Penntex Midstream Partners.
This table compares Plains Group Holdings, L.P. and Penntex Midstream Partners’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Plains Group Holdings, L.P.||0.34%||0.69%||0.30%|
|Penntex Midstream Partners||34.54%||11.00%||5.81%|
Institutional and Insider Ownership
83.2% of Plains Group Holdings, L.P. shares are held by institutional investors. Comparatively, 55.0% of Penntex Midstream Partners shares are held by institutional investors. 39.9% of Plains Group Holdings, L.P. shares are held by company insiders. 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 Plains Group Holdings, L.P. and Penntex Midstream Partners’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Plains Group Holdings, L.P.||$23.87 billion||0.15||$1.92 billion||$0.66||34.58|
|Penntex Midstream Partners||N/A||N/A||N/A||$0.25||79.96|
Plains Group Holdings, L.P. has higher revenue and earnings than Penntex Midstream Partners. Plains Group Holdings, L.P. 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.
Volatility & Risk
Plains Group Holdings, L.P. has a beta of 1.51, suggesting that its stock price is 51% more 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.
Plains Group Holdings, L.P. pays an annual dividend of $2.20 per share and has a dividend yield of 9.6%. Penntex Midstream Partners pays an annual dividend of $1.18 per share and has a dividend yield of 5.9%. Plains Group Holdings, L.P. pays out 333.5% 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. Plains Group Holdings, L.P. has raised its dividend for 2 consecutive years. Plains Group Holdings, L.P. is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Plains Group Holdings, L.P. beats Penntex Midstream Partners on 11 of the 14 factors compared between the two stocks.
Plains Group Holdings, L.P. Company Profile
Plains GP Holdings, L.P. owns and operates midstream energy infrastructure and provides logistics services for crude oil, natural gas liquids (NGL), natural gas and refined products. The Company operates through three segments: Transportation, Facilities, and Supply and Logistics. Through its three business segments, the Company is engaged in the transportation, storage, terminaling and marketing of crude oil, NGL and natural gas. The Transportation segment operations consist of fee-based activities associated with transporting crude oil and NGL on pipelines, gathering systems, trucks and barges. The Facilities segment operations consist of fee-based activities associated with providing storage, terminaling and throughput services for crude oil, refined products, NGL and natural gas, as well as NGL fractionation and isomerization services and natural gas and condensate processing services. The Supply and Logistics segment operations consist of the merchant-related activities.
Penntex Midstream Partners Company Profile
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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