Frontline (FRO) and Andeavor Logistics (ANDX) Financial Contrast

Frontline (NYSE: FRO) and Andeavor Logistics (NASDAQ:ANDX) are both mid-cap oil & gas transportation services – nec companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, earnings, institutional ownership, analyst recommendations, profitability, dividends and risk.

Profitability

This table compares Frontline and Andeavor Logistics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Frontline 4.74% 4.42% 2.11%
Andeavor Logistics 26.63% 15.11% 7.53%

Insider and Institutional Ownership

11.2% of Frontline shares are owned by institutional investors. 48.1% of Frontline shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Dividends

Frontline pays an annual dividend of $0.40 per share and has a dividend yield of 6.9%. Andeavor Logistics does not pay a dividend. Frontline pays out 25.6% of its earnings in the form of a dividend.

Risk & Volatility

Frontline has a beta of 1.94, indicating that its share price is 94% more volatile than the S&P 500. Comparatively, Andeavor Logistics has a beta of 1.12, indicating that its share price is 12% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations and price targets for Frontline and Andeavor Logistics, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Frontline 1 1 1 0 2.00
Andeavor Logistics 0 2 5 0 2.71

Frontline currently has a consensus target price of $6.00, suggesting a potential upside of 2.92%. Andeavor Logistics has a consensus target price of $58.57, suggesting a potential upside of 32.72%. Given Andeavor Logistics’ stronger consensus rating and higher possible upside, analysts clearly believe Andeavor Logistics is more favorable than Frontline.

Valuation & Earnings

This table compares Frontline and Andeavor Logistics’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Frontline $754.31 million 1.31 $117.01 million $1.56 3.74
Andeavor Logistics N/A N/A N/A $2.38 18.54

Frontline has higher revenue and earnings than Andeavor Logistics. Frontline is trading at a lower price-to-earnings ratio than Andeavor Logistics, indicating that it is currently the more affordable of the two stocks.

Summary

Andeavor Logistics beats Frontline on 8 of the 13 factors compared between the two stocks.

Frontline Company Profile

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).

Andeavor Logistics Company Profile

Andeavor Logistics LP, formerly Tesoro Logistics LP, is a full-service logistics company operating in the western and mid-continent regions of the United States. The Company operates through three segments. Its Gathering segment consists of crude oil, natural gas and produced water gathering systems in the Bakken Region and Rockies Region. Its Processing segment consists of the Vermillion processing complex, the Uinta Basin processing complex, the Blacks Fork processing complex and the Emigrant Trail processing complex. Its Terminalling and Transportation segment consists of the Northwest Products Pipeline, which includes a regulated common carrier products, a regulated common carrier refined products pipeline system connecting Tesoro Corporation’s Kenai refinery to Anchorage, Alaska, and crude oil and refined products terminals and storage facilities in the western and midwestern United States; marine terminals in California; a petroleum coke handling and storage facility.

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