Plains All American Pipeline (PAA) vs. Genesis Energy (NYSE:GEL) Head to Head Review

Plains All American Pipeline (NYSE: PAA) and Genesis Energy (NYSE:GEL) are both oils/energy companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, profitability, institutional ownership, earnings, valuation, dividends and analyst recommendations.

Risk & Volatility

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Plains All American Pipeline has a beta of 0.74, indicating that its stock price is 26% less volatile than the S&P 500. Comparatively, Genesis Energy has a beta of 1.11, indicating that its stock price is 11% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Plains All American Pipeline 3.26% 10.01% 3.52%
Genesis Energy 4.07% 7.14% 2.35%

Earnings and Valuation

This table compares Plains All American Pipeline and Genesis Energy’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Plains All American Pipeline $26.22 billion 0.64 $856.00 million $0.94 24.45
Genesis Energy $2.03 billion 1.21 $82.64 million $1.06 18.82

Plains All American Pipeline has higher revenue and earnings than Genesis Energy. Genesis Energy 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.

Institutional & Insider Ownership

43.8% of Plains All American Pipeline shares are held by institutional investors. Comparatively, 74.5% of Genesis Energy shares are held by institutional investors. 1.3% of Plains All American Pipeline shares are held by insiders. Comparatively, 0.7% of Genesis Energy shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Dividends

Plains All American Pipeline pays an annual dividend of $1.20 per share and has a dividend yield of 5.2%. Genesis Energy pays an annual dividend of $2.04 per share and has a dividend yield of 10.2%. Plains All American Pipeline pays out 127.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Genesis Energy pays out 192.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Recommendations

This is a summary of recent ratings and price targets for Plains All American Pipeline and Genesis Energy, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Plains All American Pipeline 0 10 11 0 2.52
Genesis Energy 0 2 3 0 2.60

Plains All American Pipeline currently has a consensus price target of $26.33, suggesting a potential upside of 14.59%. Genesis Energy has a consensus price target of $30.00, suggesting a potential upside of 50.38%. Given Genesis Energy’s stronger consensus rating and higher probable upside, analysts clearly believe Genesis Energy is more favorable than Plains All American Pipeline.

About Plains All American Pipeline

Plains All American Pipeline, L.P., through its subsidiaries, engages in the transportation, storage, terminalling, and marketing of crude oil, natural gas liquids (NGL), and natural gas in the United States and Canada. The company operates in three segments: Transportation, Facilities, and Supply and Logistics. The Transportation segment transports crude oil and NGL through pipelines, gathering systems, trucks, and barges. As of December 31, 2017, this segment owned and leased 18,700 miles of active crude oil and NGL pipelines and gathering systems; 32 million barrels of active and above-ground tank capacity; 810 trailers; 60 transport and storage barges; and 30 transport tugs. The Facilities segment provides storage, terminalling, and throughput services for crude oil, NGL, and natural gas; and NGL fractionation and isomerization, and natural gas and condensate processing services. This segment owned and operated approximately 77 million barrels of crude oil storage capacity; 34 million barrels of NGL storage capacity; 67 billion cubic feet of natural gas storage working capacity; 25 billion cubic feet of base gas; 9 natural gas processing plants; 1 condensate processing facility; 8 fractionation plants; 34 crude oil and NGL rail terminals; 5 marine facilities; and 1,000 miles of active pipelines. The Supply and Logistics segment purchases crude oil at the wellhead, pipeline, terminal, and rail facilities; stores inventory, and NGL and natural gas; purchases NGL; resells or exchanges crude oil and NGL; and transports crude oil and NGL on trucks, barges, railcars, pipelines, and vessels. This segment owned 14 million barrels of crude oil and NGL linefill; 4 million barrels of crude oil and NGL linefill; 730 trucks and 900 trailers; and 10,100 crude oil and NGL railcars. Plains All American Pipeline, L.P. was founded in 1998 and is headquartered in Houston, Texas. Plains All American Pipeline, L.P. operates as a subsidiary of Plains GP Holdings, L.P

About Genesis Energy

Genesis Energy L.P. is a limited partnership focused on the midstream segment of the oil and gas industry. The Company operates through four segments: Offshore Pipeline Transportation, Refinery Services, Marine Transportation, and Supply and Logistics. The Offshore Pipeline Transportation segment is engaged in the offshore transportation of crude oil and natural gas in the Gulf of Mexico. The Refinery Services segment is involved in the processing of high sulfur (or sour) gas streams as part of refining operations to remove the sulfur and selling the related by-product, sodium hydrosulfide (NaHS). The Marine Transportation segment provides waterborne transportation of petroleum products and crude oil throughout North America. The Supply and Logistics segment is engaged in terminaling, blending, storing, marketing, and transporting crude oil and petroleum products (fuel oil, asphalt and other heavy refined products) and carbon dioxide.

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