Pembina Pipeline Corp. (NYSE: PBA) and Phillips 66 Partners (NYSE:PSXP) are both mid-cap oils/energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, institutional ownership, profitabiliy, analyst recommendations, valuation and dividends.

Earnings and Valuation

This table compares Pembina Pipeline Corp. and Phillips 66 Partners’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Pembina Pipeline Corp. $3.64 billion 3.75 $971.12 million $0.97 35.04
Phillips 66 Partners $773.00 million 7.15 $449.00 million $2.33 21.98

Pembina Pipeline Corp. has higher revenue and earnings than Phillips 66 Partners. Phillips 66 Partners is trading at a lower price-to-earnings ratio than Pembina Pipeline Corp., indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Pembina Pipeline Corp. and Phillips 66 Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Pembina Pipeline Corp. 12.23% 8.49% 3.89%
Phillips 66 Partners 46.38% 22.31% 9.95%

Volatility and Risk

Pembina Pipeline Corp. has a beta of 0.71, indicating that its share price is 29% less volatile than the S&P 500. Comparatively, Phillips 66 Partners has a beta of 1.51, indicating that its share price is 51% more volatile than the S&P 500.

Dividends

Pembina Pipeline Corp. pays an annual dividend of $1.51 per share and has a dividend yield of 4.4%. Phillips 66 Partners pays an annual dividend of $2.34 per share and has a dividend yield of 4.6%. Pembina Pipeline Corp. pays out 155.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Phillips 66 Partners pays out 100.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Phillips 66 Partners has increased its dividend for 3 consecutive years. Phillips 66 Partners 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 recommmendations for Pembina Pipeline Corp. and Phillips 66 Partners, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Pembina Pipeline Corp. 0 0 9 0 3.00
Phillips 66 Partners 1 2 8 0 2.64

Pembina Pipeline Corp. currently has a consensus price target of $45.00, indicating a potential upside of 32.39%. Phillips 66 Partners has a consensus price target of $59.25, indicating a potential upside of 15.68%. Given Pembina Pipeline Corp.’s stronger consensus rating and higher possible upside, equities analysts plainly believe Pembina Pipeline Corp. is more favorable than Phillips 66 Partners.

Institutional and Insider Ownership

46.2% of Pembina Pipeline Corp. shares are owned by institutional investors. Comparatively, 42.4% of Phillips 66 Partners shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

Phillips 66 Partners beats Pembina Pipeline Corp. on 9 of the 16 factors compared between the two stocks.

About Pembina Pipeline Corp.

Pembina Pipeline Corporation is an energy transportation and service provider. The Company operates through four segments. The Conventional Pipelines segment consists of the tariff-based operations of pipelines and related facilities to deliver crude oil, condensate and natural gas liquids (NGL) in Alberta, British Columbia, Saskatchewan, and North Dakota, United States. The Oil Sands & Heavy Oil segment consists of the Syncrude, Horizon, Nipisi and Mitsue Pipelines, and the Cheecham Lateral. These pipelines and related facilities deliver synthetic crude oil produced from oil sands under long-term cost-of-service arrangements. The Gas Services segment consists of natural gas gathering and processing facilities. The Midstream segment consists of the Company’s interests in extraction and fractionation facilities, terminalling and storage hub services under a mixture of short, medium and long-term contractual arrangements.

About Phillips 66 Partners

Phillips 66 Partners LP (Phillips 66) owns, operates, develops and acquires fee-based crude oil, refined petroleum product and natural gas liquids (NGL) pipelines, terminals and other transportation and midstream assets. The Company’s assets consist of systems, such as Clifton Ridge Crude System, Eagle Ford Gathering System, Ponca Crude System, Billings Crude System, Borger Crude System, Sweeny to Pasadena Products System, Hartford Connector Products System, Gold Line Products System, Cross-Channel Connector Products System, Ponca Products System, Billings Products System, Bayway Products System, Standish Pipeline, Borger Products System, River Parish NGL System, Medford Spheres, Bayway Rail Rack, Ferndale Rail Rack, Sand Hills/Southern Hills Joint Ventures, Explorer Pipeline Joint Venture, Bakken Joint Ventures, Bayou Bridge Pipeline Joint Venture, STACK Pipeline Joint Venture, and Sweeny Fractionator and Clemens Caverns.

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