Semgroup Corporation (NYSE: SEMG) and Plains All American Pipeline, L.P. (NYSE:PAA) are both mid-cap oils/energy companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, analyst recommendations, institutional ownership, dividends, valuation and profitability.

Insider and Institutional Ownership

92.3% of Semgroup Corporation shares are held by institutional investors. Comparatively, 41.8% of Plains All American Pipeline, L.P. shares are held by institutional investors. 0.8% of Semgroup Corporation shares are held by insiders. Comparatively, 1.3% of Plains All American Pipeline, L.P. shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Semgroup Corporation and Plains All American Pipeline, L.P.’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Semgroup Corporation $1.33 billion 1.57 $2.09 million $0.03 885.00
Plains All American Pipeline, L.P. $20.18 billion 0.73 $726.00 million $1.33 15.22

Plains All American Pipeline, L.P. has higher revenue and earnings than Semgroup Corporation. Plains All American Pipeline, L.P. is trading at a lower price-to-earnings ratio than Semgroup Corporation, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current recommendations for Semgroup Corporation and Plains All American Pipeline, L.P., as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Semgroup Corporation 0 3 1 0 2.25
Plains All American Pipeline, L.P. 0 14 8 0 2.36

Semgroup Corporation presently has a consensus price target of $32.33, indicating a potential upside of 21.78%. Plains All American Pipeline, L.P. has a consensus price target of $27.32, indicating a potential upside of 34.96%. Given Plains All American Pipeline, L.P.’s stronger consensus rating and higher probable upside, analysts clearly believe Plains All American Pipeline, L.P. is more favorable than Semgroup Corporation.

Volatility & Risk

Semgroup Corporation has a beta of 2.08, meaning that its share price is 108% more volatile than the S&P 500. Comparatively, Plains All American Pipeline, L.P. has a beta of 1.01, meaning that its share price is 1% more volatile than the S&P 500.

Dividends

Semgroup Corporation pays an annual dividend of $1.80 per share and has a dividend yield of 6.8%. Plains All American Pipeline, L.P. pays an annual dividend of $2.20 per share and has a dividend yield of 10.9%. Semgroup Corporation pays out 6,000.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Plains All American Pipeline, L.P. pays out 165.4% 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, L.P. has raised its dividend for 3 consecutive years. Plains All American Pipeline, L.P. is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Semgroup Corporation and Plains All American Pipeline, L.P.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Semgroup Corporation 0.24% 3.46% 1.60%
Plains All American Pipeline, L.P. 4.42% 10.14% 3.41%

Summary

Plains All American Pipeline, L.P. beats Semgroup Corporation on 13 of the 17 factors compared between the two stocks.

About Semgroup Corporation

SemGroup Corporation is a provider of gathering, transportation, storage, distribution, marketing and other midstream services to producers, refiners of petroleum products and other market participants located in the Midwest and Rocky Mountain regions of the United States and Canada. The Company’s segments include Crude Transportation, which operates crude oil pipelines and truck transportation businesses in the United States; Crude Facilities, which operates crude oil storage and terminal businesses in the United States; Crude Supply and Logistics, which operates a crude oil marketing business; SemGas, which provides natural gas gathering and processing services; SemCAMS, which operates natural gas processing and gathering facilities in Alberta, Canada; SemLogistics, which owns petroleum products storage facility in the United Kingdom, and SemMexico, which provides liquid asphalt cement products and product application services to the Mexican market, and Corporate and Other.

About Plains All American Pipeline, L.P.

Plains All American Pipeline, L.P. owns and operates midstream energy infrastructure and provide logistics services for crude oil, natural gas liquids (NGL), natural gas and refined products. The Company operates through three segments: Transportation, Facilities, and Supply and Logistics. The Company’s transportation segment operations consist of activities associated with transporting crude oil and NGL on pipelines, gathering systems, trucks and barges. Its Facilities segment operations consist of activities associated with providing storage, terminaling and throughput services for crude oil, refined products, NGL and natural gas, as well as NGL fractionation and isomerization services and natural gas and condensate processing services. Its supply and logistics segment operations consist of the merchant-related activities, including the purchase of the United States and Canadian crude oil at the wellhead, the bulk purchase of crude oil at pipeline, terminal and rail facilities.

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