Financial Analysis: Plains All American Pipeline, L.P. (PAA) and Western Refining Logistics, (WNRL)

Plains All American Pipeline, L.P. (NYSE: PAA) and Western Refining Logistics, (NYSE:WNRL) are both oils/energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, earnings, institutional ownership, valuation, risk, analyst recommendations and dividends.

Dividends

Plains All American Pipeline, L.P. pays an annual dividend of $2.20 per share and has a dividend yield of 10.2%. Western Refining Logistics, pays an annual dividend of $1.87 per share and has a dividend yield of 7.2%. Plains All American Pipeline, L.P. pays out 165.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Western Refining Logistics, pays out 187.0% 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 All American Pipeline, L.P. has raised its dividend for 2 consecutive years. Plains All American Pipeline, L.P. is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

42.1% of Plains All American Pipeline, L.P. shares are held by institutional investors. Comparatively, 40.5% of Western Refining Logistics, shares are held by institutional investors. 1.3% of Plains All American Pipeline, L.P. shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Plains All American Pipeline, L.P. and Western Refining Logistics,’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Plains All American Pipeline, L.P. $23.87 billion 0.66 $2.01 billion $1.33 16.23
Western Refining Logistics, $2.41 billion 0.66 $128.20 million $1.00 25.95

Plains All American Pipeline, L.P. has higher revenue and earnings than Western Refining Logistics,. Plains All American Pipeline, L.P. is trading at a lower price-to-earnings ratio than Western Refining Logistics,, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Plains All American Pipeline, L.P. has a beta of 0.98, suggesting that its share price is 2% less volatile than the S&P 500. Comparatively, Western Refining Logistics, has a beta of 0.79, suggesting that its share price is 21% less volatile than the S&P 500.

Profitability

This table compares Plains All American Pipeline, L.P. and Western Refining Logistics,’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Plains All American Pipeline, L.P. 4.42% 10.14% 3.41%
Western Refining Logistics, 3.05% 78.84% 12.72%

Analyst Ratings

This is a summary of current recommendations and price targets for Plains All American Pipeline, L.P. and Western Refining Logistics,, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Plains All American Pipeline, L.P. 0 13 9 0 2.41
Western Refining Logistics, 0 2 2 0 2.50

Plains All American Pipeline, L.P. currently has a consensus target price of $28.65, suggesting a potential upside of 32.70%. Western Refining Logistics, has a consensus target price of $30.00, suggesting a potential upside of 15.61%. Given Plains All American Pipeline, L.P.’s higher probable upside, research analysts plainly believe Plains All American Pipeline, L.P. is more favorable than Western Refining Logistics,.

Summary

Plains All American Pipeline, L.P. beats Western Refining Logistics, on 12 of the 17 factors compared between the two stocks.

Plains All American Pipeline, L.P. Company Profile

Plains All American Pipeline, L.P. owns and operates midstream energy infrastructure and provide 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. The Company’s transportation segment operations consist of activities associated with transporting crude oil and NGL on pipelines, gathering systems, trucks and barges. Its Facilities segment operations consist of 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. Its supply and logistics segment operations consist of the merchant-related activities, including the purchase of the United States and Canadian crude oil at the wellhead, the bulk purchase of crude oil at pipeline, terminal and rail facilities.

Western Refining Logistics, Company Profile

Western Refining Logistics, LP owns, operates, develops, and acquires logistics and related assets and businesses to include terminals, storage tanks, pipelines and other logistics assets related to the terminaling, transportation, storage and distribution of crude oil and refined products. The Company’s segments include logistics and wholesale. The Company operates its logistics business and wholesale business under commercial and service agreements with Western Refining, Inc. (Western). Its logistics assets consist of pipeline and gathering infrastructure and terminalling, transportation and storage assets in the Southwest and the Upper Great Plains region. Its wholesale business purchases its petroleum fuels from Western, and its lubricants and additional petroleum fuels from third-party suppliers.

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