Plains All American Pipeline: A Midstream Energy Play to Power Higher Returns Amidst Market Volatility

Plains All American Pipeline (PAA) is a midstream energy company that transports, terminals, stores, and gathers crude oil and natural gas liquids through pipelines in the US and Canada. Despite a surplus in energy supply, production remains high, keeping demand for storage and transportation intact. The company's dividend yield is 8.51%, and it has a P/E ratio of 12.54, making it an attractive investment for income investors.

Plains All American Pipeline (PAA) reported strong second-quarter (Q2) 2025 earnings, beating analyst estimates by $0.02. The company's earnings per share (EPS) reached $0.36, surpassing the consensus estimate of $0.34 [1]. Despite a surplus in energy supply, the company's operations in the Permian Basin and other key markets continued to perform well, driving growth in the crude oil segment.

The company's adjusted EBITDA for the second quarter was $672 million, with the crude oil segment contributing $580 million and the natural gas liquids (NGL) segment adding $87 million [3]. The NGL segment saw a sequential decrease due to normal seasonality and lower frac spreads. However, the company's NGL business has been reclassified as discontinued operations following the announcement of its sale to Keyera for approximately $3.75 billion [3].

PAA's full-year 2025 EBITDA guidance remains unchanged at $2.8 billion to $2.95 billion, reflecting the company's continued focus on disciplined bolt-on acquisitions and capital structure optimization [3]. The company's financial flexibility, enhanced by the NGL sale, will allow it to pursue additional opportunities in the crude oil midstream market.

The stock is currently trading at $17.87, with an average 12-month price target of $21.09, and a high estimate of $25.00 [2]. The company's dividend yield stands at 8.51%, making it an attractive option for income investors [2]. The stock's price-to-earnings (P/E) ratio of 12.54 indicates that it is currently undervalued compared to its peers [2].

References:
[1] https://www.investing.com/equities/plains-all-american-pipeline
[2] https://seekingalpha.com/article/4812771-plains-all-american-belongs-in-your-dividend-portfolio?source=affiliate_program:stockanalysis.com&utm_medium=affiliate&utm_source=stockanalysis.com&affid=858&oid=16&transaction=2f94c141a7ec474fa1b46095e781f961
[3] https://www.insidermonkey.com/blog/plains-all-american-pipeline-l-p-nasdaqpaa-q2-2025-earnings-call-transcript-1588887/