TransCanada Corporation (NYSE: TRP) and Plains Group Holdings, L.P. (NYSE:PAGP) are both mid-cap oils/energy companies, but which is the better stock? We will contrast the two businesses based on the strength of their dividends, valuation, risk, earnings, profitability, institutional ownership and analyst recommendations.
Risk and Volatility
TransCanada Corporation has a beta of 0.67, meaning that its share price is 33% less volatile than the S&P 500. Comparatively, Plains Group Holdings, L.P. has a beta of 1.5, meaning that its share price is 50% more volatile than the S&P 500.
TransCanada Corporation pays an annual dividend of $2.00 per share and has a dividend yield of 4.0%. Plains Group Holdings, L.P. pays an annual dividend of $2.20 per share and has a dividend yield of 10.1%. TransCanada Corporation pays out 232.6% 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 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. TransCanada Corporation has increased its dividend for 2 consecutive years.
Valuation & Earnings
This table compares TransCanada Corporation and Plains Group Holdings, L.P.’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|TransCanada Corporation||$11.40 billion||3.83||$5.38 billion||$0.86||58.35|
|Plains Group Holdings, L.P.||$23.87 billion||0.14||$1.92 billion||$0.66||33.12|
TransCanada Corporation has higher revenue, but lower earnings than Plains Group Holdings, L.P.. Plains Group Holdings, L.P. is trading at a lower price-to-earnings ratio than TransCanada Corporation, indicating that it is currently the more affordable of the two stocks.
This table compares TransCanada Corporation and Plains Group Holdings, L.P.’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%|
Institutional and Insider Ownership
56.8% of TransCanada Corporation shares are owned by institutional investors. Comparatively, 83.0% of Plains Group Holdings, L.P. shares are owned by institutional investors. 39.9% of Plains Group Holdings, L.P. shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
This is a summary of current ratings for TransCanada Corporation and Plains Group Holdings, L.P., as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Plains Group Holdings, L.P.||0||9||8||0||2.47|
TransCanada Corporation presently has a consensus target price of $66.29, suggesting a potential upside of 32.10%. Plains Group Holdings, L.P. has a consensus target price of $28.06, suggesting a potential upside of 28.43%. Given TransCanada Corporation’s stronger consensus rating and higher possible upside, equities research analysts plainly believe TransCanada Corporation is more favorable than Plains Group Holdings, L.P..
TransCanada Corporation beats Plains Group Holdings, L.P. on 11 of the 17 factors compared between the two stocks.
TransCanada Corporation Company Profile
TransCanada Corporation is an energy infrastructure company. The Company is engaged in the development and operation of North American energy infrastructure, including natural gas and liquids pipelines, power generation and natural gas storage facilities. Its segments include Canadian Natural Gas Pipelines, U.S. Natural Gas Pipelines, Mexico Natural Gas Pipelines, Liquids Pipelines and Energy. The Company operates in three businesses: Natural Gas Pipelines, Liquids Pipelines and Energy. The Natural Gas Pipelines and Liquids Pipelines segments principally consist of its respective natural gas and liquids pipelines in Canada, the United States and Mexico, as well as its regulated natural gas storage operations in the United States. The Energy segment includes its power operations and the non-regulated natural gas storage business in Canada. TransCanada PipeLines Limited (TCPL) is its principal operating subsidiary.
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.
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