PAA Natural Gas Storage, L.P. (PNG) & Golar LNG Partners (GMLP) Critical Review
PAA Natural Gas Storage, L.P. (NYSE: PNG) and Golar LNG Partners (NASDAQ:GMLP) are both lng transportation & storage companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, profitability, risk, earnings, analyst recommendations, dividends and valuation.
Insider & Institutional Ownership
44.8% of Golar LNG Partners shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
This is a summary of current ratings and recommmendations for PAA Natural Gas Storage, L.P. and Golar LNG Partners, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|PAA Natural Gas Storage, L.P.||0||0||0||0||N/A|
|Golar LNG Partners||0||3||2||0||2.40|
Golar LNG Partners has a consensus target price of $23.25, suggesting a potential upside of 6.90%.
Golar LNG Partners pays an annual dividend of $2.31 per share and has a dividend yield of 10.6%. PAA Natural Gas Storage, L.P. does not pay a dividend. Golar LNG Partners pays out 82.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Earnings and Valuation
This table compares PAA Natural Gas Storage, L.P. and Golar LNG Partners’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|PAA Natural Gas Storage, L.P.||N/A||N/A||N/A||$0.92||N/A|
|Golar LNG Partners||$441.60 million||3.48||$172.17 million||$2.80||7.77|
Golar LNG Partners has higher revenue and earnings than PAA Natural Gas Storage, L.P.. PAA Natural Gas Storage, L.P. is trading at a lower price-to-earnings ratio than Golar LNG Partners, indicating that it is currently the more affordable of the two stocks.
This table compares PAA Natural Gas Storage, L.P. and Golar LNG Partners’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|PAA Natural Gas Storage, L.P.||N/A||N/A||N/A|
|Golar LNG Partners||43.94%||31.12%||8.86%|
Golar LNG Partners beats PAA Natural Gas Storage, L.P. on 8 of the 9 factors compared between the two stocks.
About PAA Natural Gas Storage, L.P.
PAA Natural Gas Storage, L.P. is engaged in the business of acquisition, development, ownership, operation and commercial management of natural gas storage facilities. As of December 31, 2012, the Company owned and operated three natural gas storage facilities located in Louisiana, Mississippi and Michigan. The Company also leases storage capacity and pipelines transportation capacity from third parties. The Company provides natural gas storage services to a mix of customers, including local gas distribution company’s liquefied natural gas (LNG), electric utilities, pipelines, direct industrial users, electric power generators, marketers, producers, LNG exporters and affiliates of such entities. In December 31, 2013, Plains All American Pipeline, L.P. (Plains) completed the merger of PAA Natural Gas Storage, L.P with a wholly owned subsidiary of Plains, with Plains surviving the merger as a wholly owned subsidiary of PAA.
About Golar LNG Partners
Golar LNG Partners LP owns and operates floating storage regasification units (FSRUs) and liquefied natural gas (LNG) carriers under long-term time charters. The Company operates through the LNG market segment. The Company’s fleet consists of approximately six FSRUs and over four LNG carriers. The Company’s FSRU vessels include Golar Spirit, Golar Winter, Golar Freeze, NR Satu, Golar Igloo and Golar Eskimo. Its FSRU vessels have a total capacity of approximately 846,000 cubic meters. The Company’s LNG carriers include Golar Mazo, Methane Princess, Golar Grand and Golar Maria. Its LNG carriers have a total capacity of over 564,400 cubic meters.
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