Critical Survey: Pembina Pipeline (PBA) and Its Competitors

Pembina Pipeline (NYSE:PBA) is one of 1,051 public companies in the “Oil, Gas & Consumable Fuels” industry, but how does it weigh in compared to its rivals? We will compare Pembina Pipeline to related companies based on the strength of its dividends, earnings, profitability, risk, institutional ownership, analyst recommendations and valuation.

Dividends

Pembina Pipeline pays an annual dividend of $2.12 per share and has a dividend yield of 4.2%. Pembina Pipeline pays out 88.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Oil, Gas & Consumable Fuels” companies pay a dividend yield of 9.0% and pay out -134.5% of their earnings in the form of a dividend. Pembina Pipeline has raised its dividend for 4 consecutive years. Pembina Pipeline lags its rivals as a dividend stock, given its lower dividend yield and higher payout ratio.

Analyst Recommendations

This is a summary of recent ratings for Pembina Pipeline and its rivals, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Pembina Pipeline	0	5	5	0	2.50
Pembina Pipeline Competitors	6005	27066	40961	2431	2.52

Pembina Pipeline presently has a consensus target price of $64.00, indicating a potential upside of 27.99%. As a group, “Oil, Gas & Consumable Fuels” companies have a potential upside of 26.49%. Given Pembina Pipeline’s higher possible upside, research analysts plainly believe Pembina Pipeline is more favorable than its rivals.

Profitability

This table compares Pembina Pipeline and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Pembina Pipeline	24.77%	12.60%	5.32%
Pembina Pipeline Competitors	-455.75%	19.43%	6.71%

Insider & Institutional Ownership

55.4% of Pembina Pipeline shares are held by institutional investors. Comparatively, 30.8% of shares of all “Oil, Gas & Consumable Fuels” companies are held by institutional investors. 0.1% of Pembina Pipeline shares are held by insiders. Comparatively, 15.3% of shares of all “Oil, Gas & Consumable Fuels” companies are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Pembina Pipeline and its rivals revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Pembina Pipeline	$5.57 billion	$1.21 billion	20.92
Pembina Pipeline Competitors	$10.92 billion	$5.51 billion	-0.83

Pembina Pipeline’s rivals have higher revenue and earnings than Pembina Pipeline. Pembina Pipeline is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Risk & Volatility

Pembina Pipeline has a beta of 0.59, meaning that its stock price is 41% less volatile than the S&P 500. Comparatively, Pembina Pipeline’s rivals have a beta of -3.75, meaning that their average stock price is 475% less volatile than the S&P 500.

Summary

Pembina Pipeline rivals beat Pembina Pipeline on 10 of the 15 factors compared.

About Pembina Pipeline

Pembina Pipeline Corporation is a Canadian energy transportation and midstream services company headquartered in Calgary, Alberta. Founded in 1954, it began as a pipeline operator serving oil fields in Alberta and has expanded into a range of energy infrastructure businesses. The company transports crude oil, natural gas and natural gas liquids through its pipeline networks. Its operations also include natural gas gathering and processing, liquids fractionation, storage and terminalling, along with services that help connect producers with domestic and export markets.