Plains All American Pipeline, L.P. (NYSE: PAA) and Semgroup Corporation (NYSE:SEMG) are both mid-cap oils/energy companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, institutional ownership, risk, dividends, earnings and profitability.

Dividends

Plains All American Pipeline, L.P. pays an annual dividend of $2.20 per share and has a dividend yield of 10.9%. Semgroup Corporation pays an annual dividend of $1.80 per share. Plains All American Pipeline, L.P. pays out 165.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Semgroup Corporation pays out 6,000.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Semgroup Corporation has raised its dividend for 3 consecutive years. Plains All American Pipeline, L.P. is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk & Volatility

Plains All American Pipeline, L.P. has a beta of 1.01, suggesting that its share price is 1% more volatile than the S&P 500. Comparatively, Semgroup Corporation has a beta of 2.08, suggesting that its share price is 108% more volatile than the S&P 500.

Earnings & Valuation

This table compares Plains All American Pipeline, L.P. and Semgroup Corporation’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Plains All American Pipeline, L.P. $20.18 billion 0.73 $726.00 million $1.33 15.20
Semgroup Corporation $1,332.16 0.00 $2.09 $0.03 N/A

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

Profitability

This table compares Plains All American Pipeline, L.P. and Semgroup Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Plains All American Pipeline, L.P. 4.42% 10.14% 3.41%
Semgroup Corporation 0.24% 3.46% 1.60%

Institutional & Insider Ownership

41.8% of Plains All American Pipeline, L.P. shares are held by institutional investors. Comparatively, 92.3% of Semgroup Corporation shares are held by institutional investors. 1.3% of Plains All American Pipeline, L.P. shares are held by company insiders. Comparatively, 0.8% of Semgroup Corporation shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Plains All American Pipeline, L.P. and Semgroup Corporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Plains All American Pipeline, L.P. 0 14 8 0 2.36
Semgroup Corporation 0 4 1 0 2.20

Plains All American Pipeline, L.P. presently has a consensus target price of $27.32, indicating a potential upside of 35.16%. Semgroup Corporation has a consensus target price of $32.75, indicating a potential upside of Infinity. Given Semgroup Corporation’s higher probable upside, analysts plainly believe Semgroup Corporation is more favorable than Plains All American Pipeline, L.P..

Summary

Plains All American Pipeline, L.P. beats Semgroup Corporation on 11 of the 16 factors compared between the two stocks.

About Plains All American Pipeline, L.P.

Plains All American Pipeline, L.P. owns and operates midstream energy infrastructure and provide logistics services for crude oil, natural gas liquids (NGL), natural gas and refined products. The Company operates through three segments: Transportation, Facilities, and Supply and Logistics. The Company’s transportation segment operations consist of activities associated with transporting crude oil and NGL on pipelines, gathering systems, trucks and barges. Its Facilities segment operations consist of activities associated with providing storage, terminaling and throughput services for crude oil, refined products, NGL and natural gas, as well as NGL fractionation and isomerization services and natural gas and condensate processing services. Its supply and logistics segment operations consist of the merchant-related activities, including the purchase of the United States and Canadian crude oil at the wellhead, the bulk purchase of crude oil at pipeline, terminal and rail facilities.

About Semgroup Corporation

SemGroup Corporation is a provider of gathering, transportation, storage, distribution, marketing and other midstream services to producers, refiners of petroleum products and other market participants located in the Midwest and Rocky Mountain regions of the United States and Canada. The Company’s segments include Crude Transportation, which operates crude oil pipelines and truck transportation businesses in the United States; Crude Facilities, which operates crude oil storage and terminal businesses in the United States; Crude Supply and Logistics, which operates a crude oil marketing business; SemGas, which provides natural gas gathering and processing services; SemCAMS, which operates natural gas processing and gathering facilities in Alberta, Canada; SemLogistics, which owns petroleum products storage facility in the United Kingdom, and SemMexico, which provides liquid asphalt cement products and product application services to the Mexican market, and Corporate and Other.

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