Ship Finance International (NYSE: SFL) and Pembina Pipeline (NYSE:PBA) are both energy companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, institutional ownership, valuation, profitability, earnings, analyst recommendations and dividends.
Ship Finance International pays an annual dividend of $1.40 per share and has a dividend yield of 9.0%. Pembina Pipeline pays an annual dividend of $1.73 per share and has a dividend yield of 4.9%. Ship Finance International pays out 141.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Pembina Pipeline pays out 174.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ship Finance International has increased its dividend for 2 consecutive years and Pembina Pipeline has increased its dividend for 6 consecutive years. Ship Finance International is clearly the better dividend stock, given its higher yield and lower payout ratio.
30.7% of Ship Finance International shares are held by institutional investors. Comparatively, 42.3% of Pembina Pipeline shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Valuation and Earnings
This table compares Ship Finance International 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|
|Ship Finance International||$412.95 million||3.81||$146.40 million||$0.99||15.66|
|Pembina Pipeline||$3.22 billion||5.47||$351.92 million||$0.99||35.37|
Pembina Pipeline has higher revenue and earnings than Ship Finance International. Ship Finance International is trading at a lower price-to-earnings ratio than Pembina Pipeline, indicating that it is currently the more affordable of the two stocks.
This table compares Ship Finance International and Pembina Pipeline’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Ship Finance International||28.66%||11.02%||4.01%|
Risk and Volatility
Ship Finance International has a beta of 1.41, meaning that its stock price is 41% more volatile than the S&P 500. Comparatively, Pembina Pipeline has a beta of 0.74, meaning that its stock price is 26% less volatile than the S&P 500.
This is a summary of current ratings and price targets for Ship Finance International and Pembina Pipeline, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Ship Finance International||1||1||1||0||2.00|
Ship Finance International presently has a consensus target price of $15.00, suggesting a potential downside of 3.23%. Given Ship Finance International’s higher probable upside, analysts clearly believe Ship Finance International is more favorable than Pembina Pipeline.
Pembina Pipeline beats Ship Finance International on 8 of the 15 factors compared between the two stocks.
Ship Finance International Company Profile
Ship Finance International Limited is a holding, and international ship owning and chartering company. The Company is engaged in the ownership and operation of vessels and offshore related assets, and also involved in the charter, purchase and sale of assets. Its assets consist of approximately 20 oil tankers, over 20 dry bulk carriers, approximately 20 container vessels, including a newbuilding, two car carriers, two jack-up drilling rigs, two ultra-deepwater drilling units, five offshore supply vessels, two chemical tankers and two newbuilding oil product tankers. Its oil tankers, chemical tankers and oil product tankers are all double-hull vessels. It has over nine asset types, including crude oil tankers, oil product tankers, chemical tankers, container vessels, car carriers, dry bulk carriers, jack-up drilling rigs, ultra-deepwater drilling units and offshore supply vessels. Its assets consist of a fleet of Suezmax tankers, crude carriers and oil/bulk/ore carriers.
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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