Plains All American Pipeline (NASDAQ:PAA) versus Inpex (OTCMKTS:IPXHY) Financial Analysis

Plains All American Pipeline (NASDAQ:PAA) and Inpex (OTCMKTS:IPXHY) are both large-cap energy companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, institutional ownership, earnings, risk, analyst recommendations, valuation and dividends.

Analyst Recommendations

This is a summary of current recommendations and price targets for Plains All American Pipeline and Inpex, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Plains All American Pipeline	2	7	6	2	2.47
Inpex	0	3	0	0	2.00

Plains All American Pipeline presently has a consensus price target of $25.43, suggesting a potential upside of 7.07%. Given Plains All American Pipeline’s stronger consensus rating and higher possible upside, research analysts plainly believe Plains All American Pipeline is more favorable than Inpex.

Insider & Institutional Ownership

41.8% of Plains All American Pipeline shares are held by institutional investors. Comparatively, 0.0% of Inpex shares are held by institutional investors. 1.1% of Plains All American Pipeline shares are held by 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.

Profitability

This table compares Plains All American Pipeline and Inpex’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Plains All American Pipeline	5.29%	12.13%	4.59%
Inpex	21.93%	8.53%	5.51%

Volatility & Risk

Plains All American Pipeline has a beta of 0.57, indicating that its stock price is 43% less volatile than the S&P 500. Comparatively, Inpex has a beta of 0.21, indicating that its stock price is 79% less volatile than the S&P 500.

Earnings & Valuation

This table compares Plains All American Pipeline and Inpex”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Plains All American Pipeline	$44.26 billion	0.38	$1.44 billion	$3.61	6.58
Inpex	$13.45 billion	2.08	$2.52 billion	$2.38	9.92

Inpex has lower revenue, but higher earnings than Plains All American Pipeline. Plains All American Pipeline is trading at a lower price-to-earnings ratio than Inpex, indicating that it is currently the more affordable of the two stocks.

Dividends

Plains All American Pipeline pays an annual dividend of $1.67 per share and has a dividend yield of 7.0%. Inpex pays an annual dividend of $0.42 per share and has a dividend yield of 1.8%. Plains All American Pipeline pays out 46.3% of its earnings in the form of a dividend. Inpex pays out 17.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Plains All American Pipeline has increased its dividend for 5 consecutive years. Plains All American Pipeline is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Plains All American Pipeline beats Inpex on 12 of the 18 factors compared between the two stocks.

About Plains All American Pipeline

Plains All American Pipeline, L.P., through its subsidiaries, engages in the pipeline transportation, terminalling, storage, and gathering of crude oil and natural gas liquids (NGL) in the United States and Canada. The company operates in two segments, Crude Oil and NGL. The Crude Oil segment offers gathering and transporting crude oil through pipelines, gathering systems, trucks, and at times on barges or railcars. This segment provides terminalling, storage, and other facilities-related services, as well as merchant activities. As of December 31, 2021, this segment owned and leased 18,300 miles of active crude oil transportation pipelines and gathering systems, as well as an additional 110 miles of pipelines that supports crude oil storage and terminalling facilities; 74 million barrels of commercial crude oil storage capacity; 38 million barrels of active, above-ground tank capacity; four marine facilities; a condensate processing facility; seven crude oil rail terminals and 2,100 crude oil railcars; and 640 trucks and 1,275 trailers. The Natural Gas Liquids segment engages in the natural gas processing, NGL fractionation, storage, transportation, and terminalling activities. As of December 31, 2021, this segment owned and operated four natural gas processing plants; nine fractionation plants; 28 million barrels of NGL storage capacity; approximately 1,620 miles of active NGL transportation pipelines, as well as an additional 55 miles of pipeline that supports NGL storage facilities; 16 NGL rail terminals and approximately 3,900 NGL rail cars; and approximately 220 trailers. The company was founded in 1981 and is headquartered in Houston, Texas.

About Inpex

Inpex Corporation engages in the research, exploration, development, production, and sale of oil, natural gas, and other mineral resources in Japan, rest of Asia and Oceania, Europe and NIS countries, the Middle East and Africa, and the Americas. The company is involved in the investment and lending to the companies engaged in mineral resources business, etc. It also transports natural gas, as well as operates, manages, and maintains gas pipelines. In addition, the company engages in storage of carbon capture related business. Further, it is involved in hydrogen and ammonia, renewable energy, forest conservation, and carbon recycling related businesses. Inpex Corporation was founded in 1966 and is headquartered in Tokyo, Japan.