Plains All American Pipeline, L.P. (NYSE:PAA) versus Kinder Morgan (KMI) Financial Survey

Kinder Morgan (NYSE: KMI) and Plains All American Pipeline, L.P. (NYSE:PAA) are both large-cap oils/energy companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, earnings, analyst recommendations, risk, valuation, dividends and institutional ownership.

Profitability

This table compares Kinder Morgan and Plains All American Pipeline, L.P.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Kinder Morgan 10.39% 4.37% 1.94%
Plains All American Pipeline, L.P. 4.42% 10.14% 3.41%

Analyst Recommendations

This is a breakdown of recent recommendations for Kinder Morgan and Plains All American Pipeline, L.P., as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kinder Morgan 0 8 10 0 2.56
Plains All American Pipeline, L.P. 0 14 8 0 2.36

Kinder Morgan currently has a consensus target price of $23.07, indicating a potential upside of 27.93%. Plains All American Pipeline, L.P. has a consensus target price of $27.32, indicating a potential upside of 38.73%. Given Plains All American Pipeline, L.P.’s higher probable upside, analysts clearly believe Plains All American Pipeline, L.P. is more favorable than Kinder Morgan.

Institutional and Insider Ownership

59.1% of Kinder Morgan shares are held by institutional investors. Comparatively, 41.7% of Plains All American Pipeline, L.P. shares are held by institutional investors. 14.0% of Kinder Morgan shares are held by company insiders. Comparatively, 1.3% of Plains All American Pipeline, L.P. shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Dividends

Kinder Morgan pays an annual dividend of $0.50 per share and has a dividend yield of 2.8%. Plains All American Pipeline, L.P. pays an annual dividend of $2.20 per share and has a dividend yield of 11.2%. Kinder Morgan pays out 161.3% 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, L.P. pays out 165.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Valuation and Earnings

This table compares Kinder Morgan and Plains All American Pipeline, L.P.’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Kinder Morgan $13.51 billion 2.98 $6.10 billion $0.31 58.16
Plains All American Pipeline, L.P. $23.87 billion 0.60 $2.01 billion $1.33 14.80

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

Volatility & Risk

Kinder Morgan has a beta of 0.65, suggesting that its share price is 35% less volatile than the S&P 500. Comparatively, Plains All American Pipeline, L.P. has a beta of 0.98, suggesting that its share price is 2% less volatile than the S&P 500.

Summary

Kinder Morgan beats Plains All American Pipeline, L.P. on 9 of the 16 factors compared between the two stocks.

Kinder Morgan Company Profile

Kinder Morgan, Inc. is an energy infrastructure company. It operates through five segments. Its Natural Gas Pipelines segment is engaged in the ownership and operation of interstate and intrastate natural gas pipeline and storage systems, and liquefied natural gas facilities, among others. Its CO2 segment is engaged in the production, transportation and marketing of carbon dioxide (CO2) to oil fields and the ownership and operation of a crude oil pipeline system, among others. Its Terminals segment is engaged in the ownership and/or operation of liquids and bulk terminal facilities located throughout the United States and portions of Canada, and Jones Act tankers. Its Products Pipelines segment is engaged in the ownership and operation of refined petroleum products, natural gas liquids and crude oil and condensate pipelines. Its Kinder Morgan Canada segment is engaged in the ownership and operation of the Trans Mountain pipeline system and Jet Fuel aviation turbine fuel pipeline.

Plains All American Pipeline, L.P. Company Profile

Plains All American Pipeline, L.P. owns and operates midstream energy infrastructure and provide 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. The Company’s transportation segment operations consist of activities associated with transporting crude oil and NGL on pipelines, gathering systems, trucks and barges. Its Facilities segment operations consist of 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. Its supply and logistics segment operations consist of the merchant-related activities, including the purchase of the United States and Canadian crude oil at the wellhead, the bulk purchase of crude oil at pipeline, terminal and rail facilities.

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