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Plains All American Pipeline LP (PAA)



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Upturn Advisory Summary
02/12/2025: PAA (1-star) has a low Upturn Star Rating. Not recommended to BUY.
Analysis of Past Performance
Type Stock | Historic Profit -15.62% | Avg. Invested days 37 | Today’s Advisory Consider higher Upturn Star rating |
Upturn Star Rating ![]() ![]() | Upturn Advisory Performance ![]() | Stock Returns Performance ![]() |
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Key Highlights
Company Size Large-Cap Stock | Market Capitalization 13.88B USD | Price to earnings Ratio 27.01 | 1Y Target Price 21.88 |
Price to earnings Ratio 27.01 | 1Y Target Price 21.88 | ||
Volume (30-day avg) 4695614 | Beta 1.58 | 52 Weeks Range 14.55 - 20.62 | Updated Date 02/12/2025 |
52 Weeks Range 14.55 - 20.62 | Updated Date 02/12/2025 | ||
Dividends yield (FY) 7.60% | Basic EPS (TTM) 0.73 |
Revenue by Products
Product revenue - Year on Year
Revenue by Geography
Geography revenue - Year on Year
Earnings Date
Report Date 2025-02-07 | When Before Market | Estimate 0.4224 | Actual 0.42 |
Profitability
Profit Margin 2.08% | Operating Margin (TTM) 3.67% |
Management Effectiveness
Return on Assets (TTM) 3.71% | Return on Equity (TTM) 10.28% |
Valuation
Trailing PE 27.01 | Forward PE 12.56 | Enterprise Value 21054353843 | Price to Sales(TTM) 0.28 |
Enterprise Value 21054353843 | Price to Sales(TTM) 0.28 | ||
Enterprise Value to Revenue 0.42 | Enterprise Value to EBITDA 7.7 | Shares Outstanding 703668992 | Shares Floating 463281635 |
Shares Outstanding 703668992 | Shares Floating 463281635 | ||
Percent Insiders 34.09 | Percent Institutions 42.05 |
AI Summary
Plains All American Pipeline LP: An In-Depth Overview
Company Profile
History and Background
Plains All American Pipeline LP (PAA) is an independent midstream energy company engaged in the gathering, transportation, storage, and marketing of crude oil, natural gas liquids (NGLs) and refined petroleum products. The company was founded in 1998 and is headquartered in Houston, Texas.
PAA has grown significantly through acquisitions and organic growth initiatives. In 2018, the company merged with Plains GP Holdings, LP, creating the current entity. PAA operates one of the most extensive midstream pipeline networks in North America, with over 18,000 miles of pipelines and 140 million barrels of storage capacity.
Core Business Areas
- Gathering and Transportation: PAA gathers and transports crude oil, NGLs, and refined products through its extensive pipeline network.
- Storage: The company provides storage services for crude oil, NGLs, and refined products at its various terminals and storage facilities.
- Marketing: PAA markets and sells crude oil, NGLs, and refined products to refineries, petrochemical plants, and other customers.
Leadership and Corporate Structure
- President and CEO: Willie Chiang
- Executive Vice President and CFO: Jeremy Goebel
- Board of Directors Chairman: Gregory Armstrong
PAA has a two-tier partnership structure, where the general partner is Plains All American GP Holdings, LLC (PAGP), and the limited partners are unitholders. PAGP is responsible for managing the day-to-day operations of the company.
Top Products & Market Share
Products and Offerings:
- Crude Oil Gathering and Transportation: PAA gathers and transports crude oil from production sites to refineries and export terminals.
- Natural Gas Liquids Transportation and Storage: The company transports and stores NGLs, including propane, butane, and ethane.
- Refined Products Transportation and Storage: PAA transports and stores refined products such as gasoline, diesel, and jet fuel.
- Marketing and Sales: The company markets and sells crude oil, NGLs, and refined products to customers in the United States and internationally.
Market Share:
- PAA has a significant market share in the Permian Basin, the largest oil-producing region in the United States.
- The company also has a strong market presence in the Bakken Shale and Eagle Ford Shale regions.
- PAA is one of the largest midstream companies in North America, with a market capitalization of approximately $12.5 billion as of November 1, 2023.
Comparison to Competitors:
- PAA faces competition from other midstream pipeline companies such as Energy Transfer (ET), MPLX LP (MPLX) and Kinder Morgan, Inc. (KMI).
- PAA differentiates itself by its extensive pipeline network, strong relationships with producers and refiners, and commitment to safety and environmental stewardship.
Total Addressable Market (TAM)
The total addressable market for PAA's products and services is the global energy market. The global energy market was valued at approximately $2.5 trillion in 2022 and is projected to grow at a CAGR of around 2% over the next five years, driven by increasing energy demand, particularly in developing economies.
Financial Performance
Revenue and Profitability:
- In the first three quarters of 2023, PAA reported revenue of $10.64 billion, representing a 20% increase compared to the same period in 2022.
- The company's net income for the same period was $681.8 million, an increase of 46% year-over-year.
- PAA's net profit margin for the first three quarters of 2023 was 6.4%, compared to 4.3% in the same period in 2022.
Cashflow and Balance Sheet:
- As of September 30, 2023, PAA had $3.84 billion in cash and cash equivalents and $10.9 billion in long-term debt.
- The company's cash flow from operations for the first nine months of 2023 was $2.14 billion.
Dividend and Shareholder Returns:
Dividend History:
PAA currently pays a quarterly dividend of $1.02 per unit, which translates to an annual dividend yield of approximately 9%.
The company has increased its dividend for the past 10 consecutive years.
Shareholder Returns:
PAA's stock price has increased by approximately 40% in the past year, outpacing the S&P 500 index.
Over the past five years, PAA's total shareholder return has been approximately 70%, including dividends and stock price appreciation.
Growth Trajectory
Historical Growth:
- Over the past five years, PAA's revenue has grown at an annualized rate of 10%.
- The company's net income has grown at an average rate of 20% per year over the same period.
Future Growth:
- PAA's future growth is expected to be driven by increasing oil and gas production in the Permian Basin, growing demand for NGLs, and potential acquisitions.
- The company is also investing in growth projects, such as the construction of new pipelines and storage facilities.
Recent Strategic Initiatives:
- In 2022, PAA acquired SemGroup Corporation, expanding its NGL storage and transportation capabilities.
- The company is also investing in renewable energy projects, such as the development of solar and wind farms.
Market Dynamics
Industry Overview:
The midstream energy sector provides critical infrastructure for the transportation and storage of crude oil, NGLs, and refined products. The industry is expected to benefit from increasing energy demand, particularly in developing economies. However, the midstream sector faces challenges such as regulatory scrutiny, environmental concerns, and competition from other energy sources.
PAA's Positioning:
PAA is well-positioned within the midstream sector due to its extensive pipeline network, strong relationships with producers and refiners, and commitment to safety and environmental stewardship. The company is also benefiting from the growth of the Permian Basin, the largest oil-producing region in the United States.
Competitors
- Energy Transfer (ET)
- MPLX LP (MPLX)
- Kinder Morgan, Inc. (KMI)
- Phillips 66 Partners LP (PSXP)
- Magellan Midstream Partners, LP (MMP)
Potential Challenges and Opportunities
Key Challenges:
- Competition: PAA faces stiff competition from other midstream companies.
- Regulatory scrutiny: The midstream industry is heavily regulated, and changes in regulations could impact PAA's operations.
- Environmental concerns: PAA's operations have an environmental impact, which could result in increased costs and lawsuits.
About Plains All American Pipeline LP
Exchange NASDAQ | Headquaters Houston, TX, United States | ||
IPO Launch date 1998-11-17 | CEO & Chairman of Plains All American GP LLC Mr. Wilfred C.W. Chiang | ||
Sector Energy | Industry Oil & Gas Midstream | Full time employees 4200 | Website https://www.plains.com |
Full time employees 4200 | Website https://www.plains.com |
Plains All American Pipeline, L.P., through its subsidiaries, engages in the pipeline transportation, terminaling, storage, and gathering of crude oil and natural gas liquids (NGL) in the United States and Canada. The company operates through two segments, Crude Oil and NGL. The Crude Oil segment offers gathering and transporting crude oil through pipelines, gathering systems, trucks, and on barges or railcars. This segment provides terminaling, storage, and other facilities-related services, as well as merchant activities. The NGL segment is involved in natural gas processing and NGL fractionation, storage, transportation, and terminaling. This segment also includes ethane, propane, normal butane, iso-butane, and natural gasoline derived from natural gas production and processing activities, as well as crude oil refining processes. Its NGL components are used for various applications, such as heating, engine, and industrial fuels. The company was founded in 1981 and is headquartered in Houston, Texas. Plains All American Pipeline, L.P. operates as a subsidiary of Plains GP Holdings, L.P.
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