Teekay Tankers (NYSE: TNK) and Pembina Pipeline (NYSE:PBA) are both transportation companies, but which is the superior stock? We will contrast the two businesses based on the strength of their earnings, profitability, analyst recommendations, valuation, dividends, risk and institutional ownership.
Earnings & Valuation
This table compares Teekay Tankers and Pembina Pipeline’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Teekay Tankers||$431.18 million||0.49||-$58.02 million||($0.33)||-3.55|
|Pembina Pipeline||$4.11 billion||3.97||$687.31 million||$1.50||21.59|
Teekay Tankers pays an annual dividend of $0.12 per share and has a dividend yield of 10.3%. Pembina Pipeline pays an annual dividend of $1.72 per share and has a dividend yield of 5.3%. Teekay Tankers pays out -36.4% of its earnings in the form of a dividend. Pembina Pipeline pays out 114.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Pembina Pipeline has raised its dividend for 2 consecutive years. Teekay Tankers is clearly the better dividend stock, given its higher yield and lower payout ratio.
This table compares Teekay Tankers and Pembina Pipeline’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Volatility & Risk
Teekay Tankers has a beta of 2.18, indicating that its stock price is 118% more volatile than the S&P 500. Comparatively, Pembina Pipeline has a beta of 0.69, indicating that its stock price is 31% less volatile than the S&P 500.
This is a summary of current ratings for Teekay Tankers and Pembina Pipeline, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Teekay Tankers presently has a consensus target price of $1.87, suggesting a potential upside of 59.54%. Given Teekay Tankers’ higher probable upside, equities research analysts clearly believe Teekay Tankers is more favorable than Pembina Pipeline.
Insider & Institutional Ownership
47.7% of Teekay Tankers shares are held by institutional investors. Comparatively, 48.4% of Pembina Pipeline shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Pembina Pipeline beats Teekay Tankers on 11 of the 15 factors compared between the two stocks.
About Teekay Tankers
Teekay Tankers Ltd. is an international provider of marine transportation to the oil industries. The Company’s business is to own crude oil and product tankers. The Company has two segments: conventional tanker and ship-to-ship transfer. Its conventional tanker segment consists of the operation of all of its tankers, including those employed on full service lightering contracts. Its ship-to-ship transfer segment consists of its lightering support services, including those provided to the Company’s conventional tanker segment as part of full service lightering operations and other related services. Its operations are managed by Teekay Tankers Management Services Ltd., which provides the Company with commercial, technical, administrative and strategic services. Its fleet consists of approximately 60 conventional vessels (including over 10 in-chartered vessels and an approximately 50%-owned very large crude carrier (VLCC)) and approximately six ship-to-ship (STS) support vessels.
About Pembina Pipeline
Pembina Pipeline Corporation is an energy transportation and service provider. The Company operates through four segments. The Conventional Pipelines segment consists of the tariff-based operations of pipelines and related facilities to deliver crude oil, condensate and natural gas liquids (NGL) in Alberta, British Columbia, Saskatchewan, and North Dakota, United States. The Oil Sands & Heavy Oil segment consists of the Syncrude, Horizon, Nipisi and Mitsue Pipelines, and the Cheecham Lateral. These pipelines and related facilities deliver synthetic crude oil produced from oil sands under long-term cost-of-service arrangements. The Gas Services segment consists of natural gas gathering and processing facilities. The Midstream segment consists of the Company’s interests in extraction and fractionation facilities, terminalling and storage hub services under a mixture of short, medium and long-term contractual arrangements.
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