Head-To-Head Analysis: Torm (NASDAQ:TRMD) versus Plains All American Pipeline (NASDAQ:PAA)

Torm (NASDAQ:TRMD) and Plains All American Pipeline (NASDAQ:PAA) are both energy companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, dividends, valuation, profitability, institutional ownership, earnings and analyst recommendations.

Analyst Ratings

This is a breakdown of current ratings and target prices for Torm and Plains All American Pipeline, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Torm	0	2	1	1	2.75
Plains All American Pipeline	2	7	6	2	2.47

Torm currently has a consensus price target of $38.00, suggesting a potential downside of 0.13%. Plains All American Pipeline has a consensus price target of $25.43, suggesting a potential upside of 7.20%. Given Plains All American Pipeline’s higher possible upside, analysts clearly believe Plains All American Pipeline is more favorable than Torm.

Institutional and Insider Ownership

73.9% of Torm shares are owned by institutional investors. Comparatively, 41.8% of Plains All American Pipeline shares are owned by institutional investors. 0.4% of Torm shares are owned by company insiders. Comparatively, 1.1% of Plains All American Pipeline shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Risk and Volatility

Torm has a beta of 0.12, indicating that its stock price is 88% less volatile than the S&P 500. Comparatively, Plains All American Pipeline has a beta of 0.52, indicating that its stock price is 48% less volatile than the S&P 500.

Earnings & Valuation

This table compares Torm and Plains All American Pipeline”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Torm	$1.34 billion	2.90	$285.30 million	$6.07	6.27
Plains All American Pipeline	$44.26 billion	0.38	$1.44 billion	$3.61	6.57

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

Dividends

Torm pays an annual dividend of $7.01 per share and has a dividend yield of 18.4%. Plains All American Pipeline pays an annual dividend of $1.67 per share and has a dividend yield of 7.0%. Torm pays out 115.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Plains All American Pipeline pays out 46.3% of its earnings in the form of a dividend. Plains All American Pipeline has raised its dividend for 5 consecutive years.

Profitability

This table compares Torm and Plains All American Pipeline’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Torm	35.51%	27.24%	17.96%
Plains All American Pipeline	5.29%	12.13%	4.59%

Summary

Plains All American Pipeline beats Torm on 10 of the 18 factors compared between the two stocks.

About Torm

TORM plc, a shipping company, owns and operates a fleet of product tankers in the United Kingdom. It operates in two operating segments, Tanker and Marine Exhaust. The Tanker segment transports refined oil products, such as gasoline, jet fuel, kerosene, naphtha, and gas oil, as well as dirty petroleum products, including fuel oil. The Marine Exhaust segment engages in developing and producing advanced and green marine equipment. TORM plc was founded in 1889 and is based in London, the United Kingdom.

About Plains All American Pipeline

Plains All American Pipeline, L.P., through its subsidiaries, engages in the pipeline transportation, terminalling, storage, and gathering of crude oil and natural gas liquids (NGL) in the United States and Canada. The company operates in two segments, Crude Oil and NGL. The Crude Oil segment offers gathering and transporting crude oil through pipelines, gathering systems, trucks, and at times on barges or railcars. This segment provides terminalling, storage, and other facilities-related services, as well as merchant activities. As of December 31, 2021, this segment owned and leased 18,300 miles of active crude oil transportation pipelines and gathering systems, as well as an additional 110 miles of pipelines that supports crude oil storage and terminalling facilities; 74 million barrels of commercial crude oil storage capacity; 38 million barrels of active, above-ground tank capacity; four marine facilities; a condensate processing facility; seven crude oil rail terminals and 2,100 crude oil railcars; and 640 trucks and 1,275 trailers. The Natural Gas Liquids segment engages in the natural gas processing, NGL fractionation, storage, transportation, and terminalling activities. As of December 31, 2021, this segment owned and operated four natural gas processing plants; nine fractionation plants; 28 million barrels of NGL storage capacity; approximately 1,620 miles of active NGL transportation pipelines, as well as an additional 55 miles of pipeline that supports NGL storage facilities; 16 NGL rail terminals and approximately 3,900 NGL rail cars; and approximately 220 trailers. The company was founded in 1981 and is headquartered in Houston, Texas.