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

Institutional and Insider Ownership

64.3% of Mplx shares are owned by institutional investors. Comparatively, 83.1% of Plains GP shares are owned by institutional investors. 39.9% of Plains GP shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Dividends

Mplx pays an annual dividend of $2.35 per share and has a dividend yield of 6.1%. Plains GP pays an annual dividend of $1.20 per share and has a dividend yield of 5.0%. Mplx pays out 258.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Plains GP pays out 266.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Mplx has raised its dividend for 4 consecutive years and Plains GP has raised its dividend for 3 consecutive years. Mplx is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Mplx 16.79% 5.87% 3.23%
Plains GP 0.25% 0.50% 0.22%

Valuation & Earnings

This table compares Mplx and Plains GP’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Mplx $2.59 billion 6.22 $233.00 million $0.91 42.62
Plains GP $20.18 billion 0.19 $94.00 million $0.45 53.65

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

Risk and Volatility

Mplx has a beta of 1.38, indicating that its stock price is 38% more volatile than the S&P 500. Comparatively, Plains GP has a beta of 1.48, indicating that its stock price is 48% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and target prices for Mplx and Plains GP, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Mplx 0 2 10 0 2.83
Plains GP 0 9 8 0 2.47

Mplx currently has a consensus price target of $41.45, suggesting a potential upside of 6.90%. Plains GP has a consensus price target of $25.88, suggesting a potential upside of 7.19%. Given Plains GP’s higher possible upside, analysts clearly believe Plains GP is more favorable than Mplx.

Summary

Mplx beats Plains GP on 11 of the 17 factors compared between the two stocks.

Mplx Company Profile

MPLX LP is a master limited partnership (MLP) formed by Marathon Petroleum Corporation (MPC) to own, operate, develop and acquire midstream energy infrastructure assets. The Company is engaged in the gathering, processing and transportation of natural gas; the gathering, transportation, fractionation, storage and marketing of natural gas liquids (NGLs), and the gathering, transportation and storage of crude oil and refined petroleum products. Its segments are Logistics and Storage (L&S), and Gathering and Processing (G&P). The L&S segment includes transportation and storage of crude oil, refined products and other hydrocarbon-based products. As of December 31, 2016, the G&P segment operated various natural gas gathering systems that had a combined 5,439 million cubic feet per day (mmcf/d) throughput capacity. As of December 31, 2016, its assets included infrastructure to support MPC, including approximately 2,900 miles of crude oil and refined product pipelines across nine states.

Plains GP Company Profile

Plains GP Holdings, L.P. owns and operates midstream energy infrastructure and provides 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. Through its three business segments, the Company is engaged in the transportation, storage, terminaling and marketing of crude oil, NGL and natural gas. The Transportation segment operations consist of fee-based activities associated with transporting crude oil and NGL on pipelines, gathering systems, trucks and barges. The Facilities segment operations consist of fee-based 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. The Supply and Logistics segment operations consist of the merchant-related activities.

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