Andeavor Logistics (ANDX) versus Pembina Pipeline (PBA) Financial Review

Andeavor Logistics (NYSE: ANDX) and Pembina Pipeline (NYSE:PBA) are both large-cap oils/energy companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, valuation, dividends, risk, profitability and earnings.

Volatility and Risk

Andeavor Logistics has a beta of 1.23, suggesting that its stock price is 23% more volatile than the S&P 500. Comparatively, Pembina Pipeline has a beta of 0.66, suggesting that its stock price is 34% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for Andeavor Logistics and Pembina Pipeline, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Andeavor Logistics 0 3 7 0 2.70
Pembina Pipeline 0 1 3 0 2.75

Andeavor Logistics presently has a consensus price target of $53.39, indicating a potential upside of 11.86%. Given Andeavor Logistics’ higher probable upside, equities research analysts clearly believe Andeavor Logistics is more favorable than Pembina Pipeline.

Dividends

Andeavor Logistics pays an annual dividend of $4.00 per share and has a dividend yield of 8.4%. Pembina Pipeline pays an annual dividend of $1.74 per share and has a dividend yield of 5.6%. Andeavor Logistics pays out 170.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Pembina Pipeline pays out 175.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Andeavor Logistics has raised its dividend for 2 consecutive years. Andeavor Logistics is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

35.1% of Andeavor Logistics shares are owned by institutional investors. Comparatively, 42.6% of Pembina Pipeline shares are owned by institutional investors. 0.2% of Andeavor Logistics shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Andeavor Logistics and Pembina Pipeline’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Andeavor Logistics $1.22 billion 8.46 $315.00 million $2.35 20.31
Pembina Pipeline $3.22 billion 4.83 $351.92 million $0.99 31.25

Pembina Pipeline has higher revenue and earnings than Andeavor Logistics. Andeavor Logistics is trading at a lower price-to-earnings ratio than Pembina Pipeline, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Andeavor Logistics and Pembina Pipeline’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Andeavor Logistics 23.50% 22.48% 6.61%
Pembina Pipeline 11.66% 8.36% 3.65%

Summary

Andeavor Logistics beats Pembina Pipeline on 12 of the 17 factors compared between the two stocks.

Andeavor Logistics Company Profile

Andeavor Logistics LP, formerly Tesoro Logistics LP, is a full-service logistics company operating in the western and mid-continent regions of the United States. The Company operates through three segments. Its Gathering segment consists of crude oil, natural gas and produced water gathering systems in the Bakken Region and Rockies Region. Its Processing segment consists of the Vermillion processing complex, the Uinta Basin processing complex, the Blacks Fork processing complex and the Emigrant Trail processing complex. Its Terminalling and Transportation segment consists of the Northwest Products Pipeline, which includes a regulated common carrier products, a regulated common carrier refined products pipeline system connecting Tesoro Corporation’s Kenai refinery to Anchorage, Alaska, and crude oil and refined products terminals and storage facilities in the western and midwestern United States; marine terminals in California; a petroleum coke handling and storage facility.

Pembina Pipeline Company Profile

Pembina Pipeline Corporation is an energy transportation and service provider. The Company operates through four segments. The Conventional Pipelines segment consists of the tariff-based operations of pipelines and related facilities to deliver crude oil, condensate and natural gas liquids (NGL) in Alberta, British Columbia, Saskatchewan, and North Dakota, United States. The Oil Sands & Heavy Oil segment consists of the Syncrude, Horizon, Nipisi and Mitsue Pipelines, and the Cheecham Lateral. These pipelines and related facilities deliver synthetic crude oil produced from oil sands under long-term cost-of-service arrangements. The Gas Services segment consists of natural gas gathering and processing facilities. The Midstream segment consists of the Company’s interests in extraction and fractionation facilities, terminalling and storage hub services under a mixture of short, medium and long-term contractual arrangements.

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