Plains GP (NYSE:PAGP) vs. Murphy Oil (NYSE:MUR) Critical Survey

Murphy Oil (NYSE:MUR) and Plains GP (NYSE:PAGP) are both mid-cap energy companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, valuation, risk, earnings and profitability.

Volatility and Risk

Murphy Oil has a beta of 0.52, meaning that its share price is 48% less volatile than the S&P 500. Comparatively, Plains GP has a beta of 0.54, meaning that its share price is 46% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and recommmendations for Murphy Oil and Plains GP, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Murphy Oil	2	8	4	1	2.27
Plains GP	2	6	5	1	2.36

Murphy Oil presently has a consensus target price of $39.83, indicating a potential upside of 9.24%. Plains GP has a consensus target price of $26.25, indicating a potential upside of 0.06%. Given Murphy Oil’s higher possible upside, equities research analysts clearly believe Murphy Oil is more favorable than Plains GP.

Profitability

This table compares Murphy Oil and Plains GP’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Murphy Oil	14.90%	8.41%	4.43%
Plains GP	0.21%	0.70%	0.36%

Earnings and Valuation

This table compares Murphy Oil and Plains GP”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Murphy Oil	$2.72 billion	1.92	$104.23 million	$3.21	11.36
Plains GP	$55.90 billion	0.09	$103.00 million	$2.22	11.82

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

Institutional and Insider Ownership

78.3% of Murphy Oil shares are owned by institutional investors. Comparatively, 88.3% of Plains GP shares are owned by institutional investors. 5.8% of Murphy Oil shares are owned by company insiders. Comparatively, 6.9% of Plains GP shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Dividends

Murphy Oil pays an annual dividend of $1.40 per share and has a dividend yield of 3.8%. Plains GP pays an annual dividend of $1.67 per share and has a dividend yield of 6.4%. Murphy Oil pays out 43.6% of its earnings in the form of a dividend. Plains GP pays out 75.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Murphy Oil has increased its dividend for 5 consecutive years.

Summary

Murphy Oil beats Plains GP on 9 of the 17 factors compared between the two stocks.

About Murphy Oil

Murphy Oil Corporation is an independent oil and natural gas exploration and production company. It explores for and develops crude oil, natural gas and natural gas liquids, with operations focused on onshore areas of the United States and Canada and offshore areas in the Gulf of Mexico. The company traces its roots to 1950, when it was founded as Murphy Corporation. Over time, Murphy shifted its focus toward exploration and production and expanded its activities internationally, later concentrating its portfolio on North American assets.

About Plains GP

Plains GP Holdings is a publicly traded holding company whose primary business is its ownership interest in Plains All American Pipeline. Through that relationship, it is tied to a midstream energy business focused on transporting, storing, gathering and marketing crude oil and natural gas liquids. Plains All American Pipeline operates pipelines, storage facilities and other logistics infrastructure that connect energy producers with refineries and other customers. Its operations span the United States and Canada, serving key crude oil and natural gas liquids markets.