Reviewing Phillips 66 Partners (PSXP) and Penntex Midstream Partners (PTXP)

Phillips 66 Partners (NYSE: PSXP) and Penntex Midstream Partners (NASDAQ:PTXP) are both oils/energy companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, dividends, earnings, risk, analyst recommendations, valuation and profitability.

Earnings and Valuation

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This table compares Phillips 66 Partners and Penntex Midstream Partners’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Phillips 66 Partners $1.17 billion 4.95 $461.00 million $2.59 18.39
Penntex Midstream Partners N/A N/A N/A N/A N/A

Phillips 66 Partners has higher revenue and earnings than Penntex Midstream Partners.

Institutional and Insider Ownership

41.1% of Phillips 66 Partners shares are held by institutional investors. Comparatively, 55.0% of Penntex Midstream Partners shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Dividends

Phillips 66 Partners pays an annual dividend of $2.71 per share and has a dividend yield of 5.7%. Penntex Midstream Partners pays an annual dividend of $1.18 per share and has a dividend yield of 5.9%. Phillips 66 Partners pays out 104.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Phillips 66 Partners has increased its dividend for 4 consecutive years.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Phillips 66 Partners and Penntex Midstream Partners, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Phillips 66 Partners 0 5 7 0 2.58
Penntex Midstream Partners 0 4 0 0 2.00

Phillips 66 Partners currently has a consensus target price of $57.77, suggesting a potential upside of 21.29%. Penntex Midstream Partners has a consensus target price of $20.00, suggesting a potential upside of 0.00%. Given Phillips 66 Partners’ stronger consensus rating and higher probable upside, equities analysts clearly believe Phillips 66 Partners is more favorable than Penntex Midstream Partners.

Profitability

This table compares Phillips 66 Partners and Penntex Midstream Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Phillips 66 Partners 44.16% 27.99% 10.33%
Penntex Midstream Partners 34.54% 11.00% 5.81%

Summary

Phillips 66 Partners beats Penntex Midstream Partners on 8 of the 11 factors compared between the two stocks.

About Phillips 66 Partners

Phillips 66 Partners LP (Phillips 66) owns, operates, develops and acquires fee-based crude oil, refined petroleum product and natural gas liquids (NGL) pipelines, terminals and other transportation and midstream assets. The Company’s assets consist of systems, such as Clifton Ridge Crude System, Eagle Ford Gathering System, Ponca Crude System, Billings Crude System, Borger Crude System, Sweeny to Pasadena Products System, Hartford Connector Products System, Gold Line Products System, Cross-Channel Connector Products System, Ponca Products System, Billings Products System, Bayway Products System, Standish Pipeline, Borger Products System, River Parish NGL System, Medford Spheres, Bayway Rail Rack, Ferndale Rail Rack, Sand Hills/Southern Hills Joint Ventures, Explorer Pipeline Joint Venture, Bakken Joint Ventures, Bayou Bridge Pipeline Joint Venture, STACK Pipeline Joint Venture, and Sweeny Fractionator and Clemens Caverns.

About Penntex Midstream Partners

PennTex Midstream Partners, LP, focuses on owning, operating, acquiring and developing midstream energy infrastructure assets in North America. The Company owns and operates midstream gathering, processing and transportation assets in northern Louisiana. The Company provides natural gas gathering and processing and residue gas and natural gas liquid (NGL) transportation services to producers focused on the Cotton Valley formation in northern Louisiana. The Company’s assets primarily consisted of natural gas gathering pipeline, two 200 million cubic feet per day (MMcf/d) design-capacity cryogenic natural gas processing plants, and residue gas and NGL transportation pipelines, as of December 31, 2016. In addition to providing midstream services to its primary customer with its existing assets, the Company pursues other opportunities for organic development and growth as producers in its region continue to develop their acreage.

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