Comparing Plains Group Holdings, L.P. (PAGP) and Frontline (FRO)

Plains Group Holdings, L.P. (NYSE: PAGP) and Frontline (NYSE:FRO) are both oils/energy companies, but which is the better investment? We will compare the two companies based on the strength of their dividends, risk, institutional ownership, analyst recommendations, earnings, valuation and profitability.

Profitability

This table compares Plains Group Holdings, L.P. and Frontline’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Plains Group Holdings, L.P. 0.34% 0.69% 0.30%
Frontline 4.74% 4.42% 2.11%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Plains Group Holdings, L.P. and Frontline, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Plains Group Holdings, L.P. 0 9 9 0 2.50
Frontline 1 2 1 0 2.00

Plains Group Holdings, L.P. currently has a consensus price target of $27.50, suggesting a potential upside of 20.56%. Frontline has a consensus price target of $6.00, suggesting a potential upside of 3.81%. Given Plains Group Holdings, L.P.’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Plains Group Holdings, L.P. is more favorable than Frontline.

Valuation and Earnings

This table compares Plains Group Holdings, L.P. and Frontline’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Plains Group Holdings, L.P. $23.87 billion 0.15 $1.92 billion $0.66 34.58
Frontline $660.53 million 1.49 $263.79 million $0.20 28.90

Plains Group Holdings, L.P. has higher revenue and earnings than Frontline. Frontline is trading at a lower price-to-earnings ratio than Plains Group Holdings, L.P., indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Plains Group Holdings, L.P. has a beta of 1.51, indicating that its share price is 51% more volatile than the S&P 500. Comparatively, Frontline has a beta of 2.04, indicating that its share price is 104% more volatile than the S&P 500.

Institutional & Insider Ownership

83.0% of Plains Group Holdings, L.P. shares are owned by institutional investors. Comparatively, 12.3% of Frontline shares are owned by institutional investors. 39.9% of Plains Group Holdings, L.P. shares are owned by insiders. Comparatively, 48.1% of Frontline shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Dividends

Plains Group Holdings, L.P. pays an annual dividend of $2.20 per share and has a dividend yield of 9.6%. Frontline pays an annual dividend of $0.60 per share and has a dividend yield of 10.4%. Plains Group Holdings, L.P. pays out 333.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Frontline pays out 300.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Frontline has raised its dividend for 2 consecutive years. Frontline is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Frontline beats Plains Group Holdings, L.P. on 9 of the 17 factors compared between the two stocks.

Plains Group Holdings, L.P. 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.

Frontline Company Profile

Frontline Ltd. is a shipping company. The Company is engaged in the seaborne transportation of crude oil and oil products. Its tankers segment includes crude oil tankers and product tankers. As of December 31, 2016, the Company’s fleet consisted of 28 vessels owned by the Company (seven very large crude carriers (VLCCs), 10 Suezmax tankers and 11 Aframax/LR2 tankers); 13 vessels that are under capital leases (11 VLCCs and two Suezmax tankers); one VLCC that is recorded as an investment in finance lease; four vessels chartered-in for periods of 12 months, including extension options (two VLCCs and two Suezmax tankers); two VLCCs where cost/revenue is split equally with a third party (of which one is chartered-in by it and one by a third party); three medium range product tankers that are chartered-in on short term time charters with a remaining duration of less than two months, and five vessels that are under commercial management (two Suezmax tankers and three Aframax oil tankers).

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