Phillips 66 Partners (NYSE: PSXP) and Frontline (NYSE:FRO) are both oils/energy companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, dividends, profitability, earnings, analyst recommendations, valuation and institutional ownership.
Earnings & Valuation
This table compares Phillips 66 Partners and Frontline’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Phillips 66 Partners||$1.17 billion||5.11||$461.00 million||$2.55||19.27|
|Frontline||$754.31 million||0.87||$117.01 million||$0.02||193.50|
Insider & Institutional Ownership
37.3% of Phillips 66 Partners shares are owned by institutional investors. Comparatively, 14.0% of Frontline shares are owned by institutional investors. 48.1% of Frontline shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
This table compares Phillips 66 Partners and Frontline’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Phillips 66 Partners||44.16%||27.99%||10.33%|
This is a breakdown of current ratings and recommmendations for Phillips 66 Partners and Frontline, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Phillips 66 Partners||0||5||6||0||2.55|
Phillips 66 Partners presently has a consensus price target of $58.20, suggesting a potential upside of 18.44%. Frontline has a consensus price target of $5.67, suggesting a potential upside of 46.43%. Given Frontline’s higher possible upside, analysts plainly believe Frontline is more favorable than Phillips 66 Partners.
Volatility & Risk
Phillips 66 Partners has a beta of 1.4, meaning that its share price is 40% more volatile than the S&P 500. Comparatively, Frontline has a beta of 1.81, meaning that its share price is 81% more volatile than the S&P 500.
Phillips 66 Partners pays an annual dividend of $2.71 per share and has a dividend yield of 5.5%. Frontline pays an annual dividend of $0.30 per share and has a dividend yield of 7.8%. Phillips 66 Partners pays out 106.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Frontline pays out 1,500.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Phillips 66 Partners has raised its dividend for 2 consecutive years and Frontline has raised its dividend for 4 consecutive years. Frontline is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Phillips 66 Partners beats Frontline on 11 of the 17 factors compared between the two stocks.
About Phillips 66 Partners
Phillips 66 Partners LP (Phillips 66) owns, operates, develops and acquires fee-based crude oil, refined petroleum product and natural gas liquids (NGL) pipelines, terminals and other transportation and midstream assets. The Company’s assets consist of systems, such as Clifton Ridge Crude System, Eagle Ford Gathering System, Ponca Crude System, Billings Crude System, Borger Crude System, Sweeny to Pasadena Products System, Hartford Connector Products System, Gold Line Products System, Cross-Channel Connector Products System, Ponca Products System, Billings Products System, Bayway Products System, Standish Pipeline, Borger Products System, River Parish NGL System, Medford Spheres, Bayway Rail Rack, Ferndale Rail Rack, Sand Hills/Southern Hills Joint Ventures, Explorer Pipeline Joint Venture, Bakken Joint Ventures, Bayou Bridge Pipeline Joint Venture, STACK Pipeline Joint Venture, and Sweeny Fractionator and Clemens Caverns.
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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