Comparing Pembina Pipeline (NYSE:PBA) & Antero Midstream (NYSE:AM)

Pembina Pipeline (NYSE:PBA) and Antero Midstream (NYSE:AM) are both large-cap energy companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, earnings, analyst recommendations, institutional ownership, profitability, valuation and dividends.

Profitability

This table compares Pembina Pipeline and Antero Midstream’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Pembina Pipeline	22.41%	11.41%	4.82%
Antero Midstream	32.41%	20.19%	6.56%

Insider & Institutional Ownership

55.4% of Pembina Pipeline shares are held by institutional investors. Comparatively, 54.0% of Antero Midstream shares are held by institutional investors. 0.1% of Pembina Pipeline shares are held by company insiders. Comparatively, 1.1% of Antero Midstream shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Pembina Pipeline and Antero Midstream”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Pembina Pipeline	$5.57 billion	5.00	$1.21 billion	$2.04	23.44
Antero Midstream	$1.19 billion	8.82	$413.16 million	$0.84	26.29

Pembina Pipeline has higher revenue and earnings than Antero Midstream. Pembina Pipeline is trading at a lower price-to-earnings ratio than Antero Midstream, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Pembina Pipeline has a beta of 0.58, suggesting that its share price is 42% less volatile than the S&P 500. Comparatively, Antero Midstream has a beta of 0.65, suggesting that its share price is 35% less volatile than the S&P 500.

Dividends

Pembina Pipeline pays an annual dividend of $2.13 per share and has a dividend yield of 4.5%. Antero Midstream pays an annual dividend of $0.90 per share and has a dividend yield of 4.1%. Pembina Pipeline pays out 104.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Antero Midstream pays out 107.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Pembina Pipeline has raised its dividend for 4 consecutive years. Pembina Pipeline is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a summary of current ratings and target prices for Pembina Pipeline and Antero Midstream, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Pembina Pipeline	0	4	5	0	2.56
Antero Midstream	0	5	1	0	2.17

Pembina Pipeline presently has a consensus target price of $64.00, suggesting a potential upside of 33.85%. Antero Midstream has a consensus target price of $24.50, suggesting a potential upside of 10.94%. Given Pembina Pipeline’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Pembina Pipeline is more favorable than Antero Midstream.

Summary

Pembina Pipeline beats Antero Midstream on 10 of the 17 factors compared between the two stocks.

About Pembina Pipeline

Pembina Pipeline Corporation provides energy transportation and midstream services. It operates through three segments: Pipelines, Facilities, and Marketing & New Ventures. The Pipelines segment operates conventional, oil sands and heavy oil, and transmission assets with a transportation capacity of 2.9 millions of barrels of oil equivalent per day, the ground storage capacity of 10 millions of barrels, and rail terminalling capacity of approximately 105 thousands of barrels of oil equivalent per day serving markets and basins across North America. The Facilities segment offers infrastructure that provides customers with natural gas, condensate, and natural gas liquids (NGLs), including ethane, propane, butane, and condensate; and includes 354 thousands of barrels per day of NGL fractionation capacity, 21 millions of barrels of cavern storage capacity, and associated pipeline, and rail terminalling facilities and a liquefied propane export facility. The Marketing & New Ventures segment buys and sells hydrocarbon liquids and natural gas originating in the Western Canadian sedimentary basin and other basins. Pembina Pipeline Corporation was incorporated in 1954 and is headquartered in Calgary, Canada.

About Antero Midstream

Antero Midstream Corporation owns, operates, and develops midstream energy assets in the Appalachian Basin. It operates in two segments, Gathering and Processing, and Water Handling. The Gathering and Processing segment includes a network of gathering pipelines and compressor stations that collects and processes production from Antero Resources' wells in West Virginia and Ohio. The Water Handling segment delivers fresh water from sources, including the Ohio River, local reservoirs, and various regional waterways; uses water handling systems to transport flowback and produced water; and offers pumping stations, water storage, and blending facilities. The company was founded in 2002 and is headquartered in Denver, Colorado.