Dynagas LNG Partners (NYSE: DLNG) and PAA Natural Gas Storage (NYSE:PNG) are both transportation companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, risk, dividends, profitability, earnings, institutional ownership and valuation.

Institutional and Insider Ownership

17.4% of Dynagas LNG Partners shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Dividends

Dynagas LNG Partners pays an annual dividend of $1.69 per share and has a dividend yield of 13.9%. PAA Natural Gas Storage does not pay a dividend. Dynagas LNG Partners pays out 291.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Recommendations

This is a summary of recent ratings for Dynagas LNG Partners and PAA Natural Gas Storage, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Dynagas LNG Partners 0 2 3 0 2.60
PAA Natural Gas Storage 0 0 0 0 N/A

Dynagas LNG Partners currently has a consensus target price of $16.80, suggesting a potential upside of 38.04%.

Valuation and Earnings

This table compares Dynagas LNG Partners and PAA Natural Gas Storage’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Dynagas LNG Partners $169.85 million 2.55 $41.40 million $0.58 20.98
PAA Natural Gas Storage N/A N/A N/A $0.92 N/A

Dynagas LNG Partners has higher revenue and earnings than PAA Natural Gas Storage. PAA Natural Gas Storage is trading at a lower price-to-earnings ratio than Dynagas LNG Partners, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Dynagas LNG Partners and PAA Natural Gas Storage’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Dynagas LNG Partners 18.63% 15.18% 3.95%
PAA Natural Gas Storage N/A N/A N/A

Summary

Dynagas LNG Partners beats PAA Natural Gas Storage on 7 of the 9 factors compared between the two stocks.

Dynagas LNG Partners Company Profile

Dynagas LNG Partners LP is a limited partnership, which focuses on owning and operating liquid natural gas (LNG) carriers. The Company’s vessels are employed on multi-year time charters with international energy companies. As of December 31, 2016, the Company owned and operated a fleet of six LNG carriers, consisting of the three LNG carriers in its Initial Fleet, the Clean Energy, the Ob River and the Amur River, and three 2013-built Ice Class LNG carriers that the Company acquired from its Sponsor the Arctic Aurora, the Yenisei River, and the Lena River (collectively referred as its Fleet). The vessels in its Fleet have an average age of 6.6 years and are contracted under multi-year charters with Shell, Gazprom, Statoil and Yamal with an average remaining charter term, as of March 17, 2017, of approximately 10.6 years, including the charter agreements relating to the Yenisei River and the Lena River with Yamal. The Company’s Fleet is managed by its manager, Dynagas Ltd.

PAA Natural Gas Storage Company Profile

PAA Natural Gas Storage, L.P. is engaged in the business of acquisition, development, ownership, operation and commercial management of natural gas storage facilities. As of December 31, 2012, the Company owned and operated three natural gas storage facilities located in Louisiana, Mississippi and Michigan. The Company also leases storage capacity and pipelines transportation capacity from third parties. The Company provides natural gas storage services to a mix of customers, including local gas distribution company’s liquefied natural gas (LNG), electric utilities, pipelines, direct industrial users, electric power generators, marketers, producers, LNG exporters and affiliates of such entities. In December 31, 2013, Plains All American Pipeline, L.P. (Plains) completed the merger of PAA Natural Gas Storage, L.P with a wholly owned subsidiary of Plains, with Plains surviving the merger as a wholly owned subsidiary of PAA.

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