Andeavor Logistics (NYSE: ANDX) and Frontline (NYSE:FRO) are both mid-cap oils/energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their risk, institutional ownership, analyst recommendations, earnings, profitability, dividends and valuation.

Analyst Ratings

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Andeavor Logistics 0 3 6 0 2.67
Frontline 1 1 1 0 2.00

Andeavor Logistics currently has a consensus price target of $53.50, suggesting a potential downside of 1.40%. Frontline has a consensus price target of $5.67, suggesting a potential upside of 11.99%. Given Frontline’s higher probable upside, analysts clearly believe Frontline is more favorable than Andeavor Logistics.

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 1.88, meaning that its share price is 88% more volatile than the S&P 500.

Earnings and Valuation

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Andeavor Logistics $1.22 billion 9.61 $315.00 million $2.35 23.09
Frontline $754.31 million 1.14 $117.01 million $0.15 33.73

Andeavor Logistics has higher revenue and earnings than Frontline. 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.

Insider and Institutional Ownership

34.9% of Andeavor Logistics shares are owned by institutional investors. Comparatively, 13.2% of Frontline shares are owned by institutional investors. 0.2% of Andeavor Logistics shares are owned by company insiders. Comparatively, 48.1% of Frontline shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Dividends

Andeavor Logistics pays an annual dividend of $3.94 per share and has a dividend yield of 7.3%. Frontline pays an annual dividend of $0.30 per share and has a dividend yield of 5.9%. Andeavor Logistics pays out 167.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Frontline pays out 200.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Frontline has raised its dividend for 2 consecutive years. Andeavor Logistics is clearly the better dividend stock, given its higher yield and lower payout ratio.

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 23.50% 22.48% 6.61%
Frontline 0.29% 1.70% 0.79%

Summary

Andeavor Logistics beats Frontline on 12 of the 17 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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