Andeavor Logistics (NASDAQ: ANDX) and Frontline (NYSE:FRO) are both oil & gas transportation services – nec companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, risk, earnings, dividends, valuation, profitability and analyst recommendations.

Volatility and Risk

Andeavor Logistics has a beta of 1.12, meaning that its share price is 12% more volatile than the S&P 500. Comparatively, Frontline has a beta of 1.94, meaning that its share price is 94% more volatile than the S&P 500.

Profitability

This table compares Andeavor Logistics and Frontline’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Andeavor Logistics 26.63% 15.11% 7.53%
Frontline 4.74% 4.42% 2.11%

Insider & Institutional Ownership

12.1% of Frontline shares are held by institutional investors. 48.1% of Frontline 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.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Andeavor Logistics and Frontline, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Andeavor Logistics 0 2 4 0 2.67
Frontline 1 1 1 0 2.00

Andeavor Logistics presently has a consensus target price of $59.17, suggesting a potential upside of 30.64%. Frontline has a consensus target price of $6.00, suggesting a potential downside of 4.31%. Given Andeavor Logistics’ stronger consensus rating and higher possible upside, equities analysts clearly believe Andeavor Logistics is more favorable than Frontline.

Earnings & Valuation

This table compares Andeavor Logistics and Frontline’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Andeavor Logistics N/A N/A N/A $1.96 23.11
Frontline $754.31 million 1.41 $117.01 million $0.20 31.35

Frontline has higher revenue and earnings than Andeavor Logistics. Andeavor Logistics is trading at a lower price-to-earnings ratio than Frontline, indicating that it is currently the more affordable of the two stocks.

Dividends

Frontline pays an annual dividend of $0.60 per share and has a dividend yield of 9.6%. Andeavor Logistics does not pay a dividend. Frontline pays out 300.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

Andeavor Logistics beats Frontline on 8 of the 13 factors compared between the two stocks.

About Andeavor Logistics

Andeavor Logistics LP, formerly Tesoro Logistics LP, is a full-service logistics company operating in the western and mid-continent regions of the United States. The Company operates through three segments. Its Gathering segment consists of crude oil, natural gas and produced water gathering systems in the Bakken Region and Rockies Region. Its Processing segment consists of the Vermillion processing complex, the Uinta Basin processing complex, the Blacks Fork processing complex and the Emigrant Trail processing complex. Its Terminalling and Transportation segment consists of the Northwest Products Pipeline, which includes a regulated common carrier products, a regulated common carrier refined products pipeline system connecting Tesoro Corporation’s Kenai refinery to Anchorage, Alaska, and crude oil and refined products terminals and storage facilities in the western and midwestern United States; marine terminals in California; a petroleum coke handling and storage facility.

About Frontline

Frontline Ltd. is a shipping company. The Company is engaged in the seaborne transportation of crude oil and oil products. Its tankers segment includes crude oil tankers and product tankers. As of December 31, 2016, the Company’s fleet consisted of 28 vessels owned by the Company (seven very large crude carriers (VLCCs), 10 Suezmax tankers and 11 Aframax/LR2 tankers); 13 vessels that are under capital leases (11 VLCCs and two Suezmax tankers); one VLCC that is recorded as an investment in finance lease; four vessels chartered-in for periods of 12 months, including extension options (two VLCCs and two Suezmax tankers); two VLCCs where cost/revenue is split equally with a third party (of which one is chartered-in by it and one by a third party); three medium range product tankers that are chartered-in on short term time charters with a remaining duration of less than two months, and five vessels that are under commercial management (two Suezmax tankers and three Aframax oil tankers).

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