Plains GP (NYSE: PAGP) and Buckeye Partners (NYSE:BPL) are both mid-cap energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, profitability, institutional ownership, earnings, risk, dividends and analyst recommendations.
Volatility & Risk
Plains GP has a beta of 1.51, meaning that its stock price is 51% more volatile than the S&P 500. Comparatively, Buckeye Partners has a beta of 1.1, meaning that its stock price is 10% more volatile than the S&P 500.
This table compares Plains GP and Buckeye Partners’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Plains GP||$20.18 billion||0.17||$94.00 million||$0.44||51.77|
|Buckeye Partners||$3.25 billion||2.48||$535.60 million||$3.27||16.83|
Buckeye Partners has lower revenue, but higher earnings than Plains GP. Buckeye Partners is trading at a lower price-to-earnings ratio than Plains GP, indicating that it is currently the more affordable of the two stocks.
This is a summary of current ratings and price targets for Plains GP and Buckeye Partners, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Plains GP presently has a consensus price target of $25.88, suggesting a potential upside of 13.59%. Buckeye Partners has a consensus price target of $65.00, suggesting a potential upside of 18.14%. Given Buckeye Partners’ higher probable upside, analysts plainly believe Buckeye Partners is more favorable than Plains GP.
This table compares Plains GP and Buckeye Partners’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Institutional and Insider Ownership
83.0% of Plains GP shares are held by institutional investors. Comparatively, 70.2% of Buckeye Partners shares are held by institutional investors. 39.9% of Plains GP shares are held by insiders. Comparatively, 0.4% of Buckeye Partners shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Plains GP pays an annual dividend of $1.20 per share and has a dividend yield of 5.3%. Buckeye Partners pays an annual dividend of $5.05 per share and has a dividend yield of 9.2%. Plains GP pays out 272.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Buckeye Partners pays out 154.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Plains GP has raised its dividend for 3 consecutive years and Buckeye Partners has raised its dividend for 15 consecutive years. Buckeye Partners is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Buckeye Partners beats Plains GP on 10 of the 17 factors compared between the two stocks.
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.
Buckeye Partners Company Profile
Buckeye Partners, L.P. (Buckeye) owns and operates a network of integrated assets providing midstream logistic solutions, primarily consisting of the transportation, storage, processing and marketing of liquid petroleum products. Its segments include Domestic Pipelines & Terminals, Global Marine Terminals and Merchant Services. As of December 31, 2016, the Domestic Pipelines & Terminals segment owned and operated approximately 6,000 miles of pipeline located primarily in the northeastern and upper Midwestern portions of the United States, and serviced approximately 110 delivery locations. The Global Marine Terminals segment provides marine accessible bulk storage and blending services, rail and truck rack loading/unloading, along with petroleum processing services in the East Coast and Gulf Coast regions of the United States and in the Caribbean. The Merchant Services segment is a wholesale distributor of petroleum products in the continental United States and in the Caribbean.
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