Comparing Torm (NASDAQ:TRMD) and Plains All American Pipeline (NASDAQ:PAA)

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

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%

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Torm	0	1	2	1	3.00
Plains All American Pipeline	2	7	7	1	2.41

Torm presently has a consensus target price of $38.00, indicating a potential upside of 8.82%. Plains All American Pipeline has a consensus target price of $25.43, indicating a potential upside of 2.52%. Given Torm’s stronger consensus rating and higher probable upside, equities analysts plainly believe Torm is more favorable than Plains All American Pipeline.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Torm	$1.76 billion	2.02	$285.30 million	$6.07	5.75
Plains All American Pipeline	$52.30 billion	0.33	$1.44 billion	$3.61	6.87

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.

Insider & Institutional Ownership

73.9% of Torm shares are held by institutional investors. Comparatively, 41.8% of Plains All American Pipeline shares are held by institutional investors. 0.4% of Torm shares are held by insiders. Comparatively, 1.1% of Plains All American Pipeline shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Volatility & Risk

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

Dividends

Torm pays an annual dividend of $7.00 per share and has a dividend yield of 20.0%. Plains All American Pipeline pays an annual dividend of $1.67 per share and has a dividend yield of 6.7%. Torm pays out 115.3% 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 pays out 46.3% of its earnings in the form of a dividend. Plains All American Pipeline has increased its dividend for 5 consecutive years.

Summary

Torm beats Plains All American Pipeline on 9 of the 17 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.