Targa Resources (NYSE: TRGP) and Suburban Propane Partners (NYSE:SPH) are both oils/energy companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, analyst recommendations, valuation, profitability, dividends, earnings and risk.
Targa Resources pays an annual dividend of $3.64 per share and has a dividend yield of 7.9%. Suburban Propane Partners pays an annual dividend of $2.40 per share and has a dividend yield of 10.6%. Targa Resources pays out -742.8% of its earnings in the form of a dividend. Suburban Propane Partners pays out 369.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
This table compares Targa Resources and Suburban Propane Partners’ top-line revenue, earnings per share (EPS) 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||($0.49)||-94.32|
|Suburban Propane Partners||$1.19 billion||1.17||$37.99 million||$0.65||34.78|
Targa Resources has higher revenue and earnings than Suburban Propane Partners. Targa Resources is trading at a lower price-to-earnings ratio than Suburban Propane Partners, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
Targa Resources has a beta of 2.05, suggesting that its share price is 105% more volatile than the S&P 500. Comparatively, Suburban Propane Partners has a beta of 0.65, suggesting that its share price is 35% less volatile than the S&P 500.
This is a summary of recent recommendations and price targets for Targa Resources and Suburban Propane Partners, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Suburban Propane Partners||1||1||2||0||2.25|
Targa Resources currently has a consensus target price of $54.56, suggesting a potential upside of 18.05%. Suburban Propane Partners has a consensus target price of $26.50, suggesting a potential upside of 17.20%. Given Targa Resources’ stronger consensus rating and higher probable upside, equities research analysts clearly believe Targa Resources is more favorable than Suburban Propane Partners.
This table compares Targa Resources and Suburban Propane Partners’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Suburban Propane Partners||3.27%||6.57%||1.83%|
Insider and Institutional Ownership
90.1% of Targa Resources shares are held by institutional investors. Comparatively, 28.1% of Suburban Propane Partners shares are held by institutional investors. 1.9% of Targa Resources shares are held by company insiders. Comparatively, 0.6% of Suburban Propane Partners shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Targa Resources beats Suburban Propane Partners on 10 of the 17 factors compared between the two stocks.
Targa Resources Company Profile
Targa Resources Corp. is a midstream energy company in North America. It provides midstream services. Its segments include Gathering and Processing, and Logistics and Marketing (Downstream Business). It is engaged in the business of gathering, compressing, treating, processing and selling natural gas; storing, fractionating, treating, transporting and selling natural gas liquids (NGLs) and NGL products, including services to liquefied petroleum gas exporters; gathering, storing and terminalling crude oil, and storing, terminalling and selling refined petroleum products. The Gathering and Processing segment consists of gathering, compressing, dehydrating, treating, conditioning, processing, and marketing natural gas and gathering crude oil. The Logistics and Marketing segment includes all the activities necessary to convert mixed NGLs into NGL products and provides certain services, such as storing, fractionating, terminalling, transporting and marketing of NGLs and NGL products.
Suburban Propane Partners Company Profile
Suburban Propane Partners, L.P. is a marketer and distributor of a range of products. The Company specializes in the distribution of propane, fuel oil and refined fuels, as well as the marketing of natural gas and electricity in deregulated markets. The Company’s segments include Propane, Fuel Oil and Refined Fuels, Natural Gas and Electricity, and All Other. In support of its marketing and distribution operations, the Company installs and services a range of home comfort equipment, particularly in the areas of heating and ventilation. The Company conducts its business through Suburban Propane, L.P., which operates its propane business and assets (the Operating Partnership), and its direct and indirect subsidiaries. As of September 24, 2016, it had sold approximately 414.8 million gallons of propane and 30.9 million gallons of fuel oil and refined fuels to retail customers. The Company owns and operates a propane storage facility in Elk Grove, California.
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