Analyzing Pembina Pipeline (NYSE:PBA) and Anadarko Petroleum (NASDAQ:APC)

Anadarko Petroleum (NASDAQ:APC) and Pembina Pipeline (NYSE:PBA) are both energy companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, risk, earnings, valuation and analyst recommendations.

Profitability

This table compares Anadarko Petroleum and Pembina Pipeline’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Anadarko Petroleum	0.65%	21.23%	3.06%
Pembina Pipeline	24.77%	12.60%	5.32%

Valuation & Earnings

This table compares Anadarko Petroleum and Pembina Pipeline”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Anadarko Petroleum	$5.58 billion	0.03	$32.73 million	$0.97	15.36
Pembina Pipeline	$5.57 billion	5.12	$1.21 billion	$2.39	20.49

Pembina Pipeline has lower revenue, but higher earnings than Anadarko Petroleum. Anadarko Petroleum is trading at a lower price-to-earnings ratio than Pembina Pipeline, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent recommendations for Anadarko Petroleum and Pembina Pipeline, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Anadarko Petroleum	2	0	4	1	2.57
Pembina Pipeline	0	5	5	0	2.50

Anadarko Petroleum presently has a consensus price target of $21.40, indicating a potential upside of 43.62%. Pembina Pipeline has a consensus price target of $64.00, indicating a potential upside of 30.69%. Given Anadarko Petroleum’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Anadarko Petroleum is more favorable than Pembina Pipeline.

Insider & Institutional Ownership

55.4% of Pembina Pipeline shares are held by institutional investors. 0.1% of Pembina Pipeline shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Dividends

Anadarko Petroleum pays an annual dividend of $2.00 per share and has a dividend yield of 13.4%. Pembina Pipeline pays an annual dividend of $2.12 per share and has a dividend yield of 4.3%. Anadarko Petroleum pays out 206.2% 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 pays out 88.7% 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 increased its dividend for 4 consecutive years.

Summary

Pembina Pipeline beats Anadarko Petroleum on 11 of the 17 factors compared between the two stocks.

About Anadarko Petroleum

Anadarko Petroleum Corporation was an independent oil and natural gas exploration and production company headquartered in The Woodlands, Texas. Its operations focused on finding, developing and producing crude oil, natural gas and natural gas liquids, with additional activities in gathering, processing and other midstream services. The company’s principal resource areas included U.S. onshore properties, particularly in the Delaware and DJ basins, as well as assets in the Gulf of Mexico. Anadarko also held international interests, including oil and natural gas projects in Algeria, Ghana and other regions.

About Pembina Pipeline

Pembina Pipeline Corporation is a Canadian energy transportation and midstream services company headquartered in Calgary, Alberta. Founded in 1954, it began as a pipeline operator serving oil fields in Alberta and has expanded into a range of energy infrastructure businesses. The company transports crude oil, natural gas and natural gas liquids through its pipeline networks. Its operations also include natural gas gathering and processing, liquids fractionation, storage and terminalling, along with services that help connect producers with domestic and export markets.