Targa Resources (NYSE:TRGP) and Tallgrass Energy GP (NYSE:TEGP) are both oils/energy companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, analyst recommendations, valuation, risk and dividends.
This table compares Targa Resources and Tallgrass Energy GP’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Tallgrass Energy GP||N/A||N/A||N/A|
This table compares Targa Resources and Tallgrass Energy GP’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Targa Resources||$8.81 billion||1.15||$54.00 million||($0.43)||-103.26|
|Tallgrass Energy GP||N/A||N/A||N/A||N/A||N/A|
Targa Resources has higher revenue and earnings than Tallgrass Energy GP.
Targa Resources pays an annual dividend of $3.64 per share and has a dividend yield of 8.2%. Tallgrass Energy GP pays an annual dividend of $1.95 per share and has a dividend yield of 8.8%. Targa Resources pays out -846.5% of its earnings in the form of a dividend. Tallgrass Energy GP has increased its dividend for 2 consecutive years. Tallgrass Energy GP is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Insider & Institutional Ownership
92.7% of Targa Resources shares are owned by institutional investors. Comparatively, 31.8% of Tallgrass Energy GP shares are owned by institutional investors. 1.8% of Targa Resources shares are owned by insiders. 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 breakdown of recent ratings and target prices for Targa Resources and Tallgrass Energy GP, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Tallgrass Energy GP||1||2||3||0||2.33|
Targa Resources presently has a consensus price target of $58.28, suggesting a potential upside of 31.26%. Tallgrass Energy GP has a consensus price target of $23.17, suggesting a potential upside of 4.54%. Given Targa Resources’ stronger consensus rating and higher probable upside, research analysts clearly believe Targa Resources is more favorable than Tallgrass Energy GP.
Targa Resources beats Tallgrass Energy GP on 11 of the 13 factors compared between the two stocks.
About Targa Resources
Targa Resources Corp., together with its subsidiary, Targa Resources Partners LP, owns, operates, acquires, and develops a portfolio of midstream energy assets in North America. It operates in two segments, Gathering and Processing, and Logistics and Marketing. The company engages in gathering, compressing, treating, processing, and selling natural gas; storing, fractionating, treating, transporting, and selling natural gas liquids (NGL) and NGL products, including services to liquefied petroleum gas exporters; gathering, storing, terminaling, and selling crude oil; and storing, terminaling, and selling refined petroleum products. It is also involved in the purchase and resale of NGL products; and wholesale of propane, as well as provision of related logistics services to multi-state retailers, independent retailers, and other end-users. In addition, the company offers NGL balancing services; and transportation services to refineries and petrochemical companies in the Gulf Coast area, as well as purchases, markets, and resells natural gas. The company operates approximately 27,000 miles of natural gas pipelines, including 37 owned and operated processing plants; and owns or operates a total of 39 storage wells with a gross storage capacity of approximately 69 million barrels. As of December 31, 2017, it leased and managed approximately 640 railcars; 130 transport tractors; and 18 company-owned pressurized NGL barges. The company was founded in 2005 and is headquartered in Houston, Texas.
About Tallgrass Energy GP
Tallgrass Energy GP, LP, through its interests in Tallgrass Equity, LLC, provides crude oil transportation services to customers in Wyoming, Colorado, and the surrounding regions of the United States. The company operates through three segments: Natural Gas Transportation; Crude Oil Transportation; and Gathering, Processing & Terminalling. It also provides natural gas transportation and storage services for customers in the Rocky Mountain, Midwest, and Appalachian regions; natural gas and crude oil gathering and processing services for customers in Wyoming; and natural gas liquids (NGLs) transportation services in Northeast Colorado and Wyoming. In addition, the company offers water business services, including freshwater transportation, and produced water gathering and disposal in Colorado, Texas, and Wyoming; crude oil storage and terminalling services in Colorado; and marketing services for NGLs and crude oil. Tallgrass Energy GP, LP was founded in 2013 and is based in Leawood, Kansas.
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