Teekay Offshore Partners L.P. (NYSE: TOO) and Penntex Midstream Partners (NASDAQ:PTXP) are both transportation companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, risk, earnings, analyst recommendations and profitability.

Profitability

This table compares Teekay Offshore Partners L.P. and Penntex Midstream Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Teekay Offshore Partners L.P. 11.51% 5.24% 0.78%
Penntex Midstream Partners 34.54% 11.00% 5.81%

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Teekay Offshore Partners L.P. and Penntex Midstream Partners, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Teekay Offshore Partners L.P. 1 1 3 0 2.40
Penntex Midstream Partners 0 6 1 0 2.14

Teekay Offshore Partners L.P. currently has a consensus price target of $4.67, suggesting a potential upside of 81.58%. Penntex Midstream Partners has a consensus price target of $19.17, suggesting a potential downside of 4.12%. Given Teekay Offshore Partners L.P.’s stronger consensus rating and higher probable upside, research analysts clearly believe Teekay Offshore Partners L.P. is more favorable than Penntex Midstream Partners.

Institutional & Insider Ownership

48.4% of Teekay Offshore Partners L.P. shares are held by institutional investors. Comparatively, 55.0% of Penntex Midstream Partners shares are held by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Teekay Offshore Partners L.P. and Penntex Midstream Partners’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Teekay Offshore Partners L.P. $1.10 billion 0.36 $495.18 million $0.49 5.24
Penntex Midstream Partners N/A N/A N/A $0.25 79.96

Teekay Offshore Partners L.P. has higher revenue and earnings than Penntex Midstream Partners. Teekay Offshore Partners L.P. is trading at a lower price-to-earnings ratio than Penntex Midstream Partners, indicating that it is currently the more affordable of the two stocks.

Dividends

Teekay Offshore Partners L.P. pays an annual dividend of $0.04 per share and has a dividend yield of 1.6%. Penntex Midstream Partners pays an annual dividend of $1.18 per share and has a dividend yield of 5.9%. Teekay Offshore Partners L.P. pays out 8.2% of its earnings in the form of a dividend. Penntex Midstream Partners pays out 472.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Risk and Volatility

Teekay Offshore Partners L.P. has a beta of 2.76, suggesting that its share price is 176% more volatile than the S&P 500. Comparatively, Penntex Midstream Partners has a beta of 1, suggesting that its share price has a similar volatility profile to the S&P 500.

Summary

Teekay Offshore Partners L.P. beats Penntex Midstream Partners on 7 of the 12 factors compared between the two stocks.

About Teekay Offshore Partners L.P.

Teekay Offshore Partners L.P. is a provider of marine transportation, oil production, storage, long-distance towing and offshore installation and maintenance and safety services to the offshore oil industry in North Sea, Brazil and the East Coast of Canada. The Company operates shuttle tankers; towage vessels; floating, production, storage and off-loading (FPSO) units; floating storage and off-take (FSO) units; units for maintenance and safety (UMS); long-distance towing and offshore installation vessels, and conventional crude oil tankers. Its segments include shuttle tanker segment, FPSO segment, FSO segment, conventional tanker segment, towage segment and UMS segment. Its fleet consists of over 30 shuttle tankers, such as over three chartered-in vessels and a HiLoad Dynamic Positioning unit, over six FPSO units, approximately seven FSO units, over six long-distance towing and offshore installation vessels, a UMS and over two conventional oil tankers.

About Penntex Midstream Partners

PennTex Midstream Partners, LP, focuses on owning, operating, acquiring and developing midstream energy infrastructure assets in North America. The Company owns and operates midstream gathering, processing and transportation assets in northern Louisiana. The Company provides natural gas gathering and processing and residue gas and natural gas liquid (NGL) transportation services to producers focused on the Cotton Valley formation in northern Louisiana. The Company’s assets primarily consisted of natural gas gathering pipeline, two 200 million cubic feet per day (MMcf/d) design-capacity cryogenic natural gas processing plants, and residue gas and NGL transportation pipelines, as of December 31, 2016. In addition to providing midstream services to its primary customer with its existing assets, the Company pursues other opportunities for organic development and growth as producers in its region continue to develop their acreage.

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