NGL Energy Partners (NYSE:NGL) and Targa Resources (NYSE:TRGP) Critical Survey

NGL Energy Partners (NYSE:NGLGet Rating) and Targa Resources (NYSE:TRGPGet Rating) are both oils/energy companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, valuation, analyst recommendations, risk, dividends, institutional ownership and profitability.

Insider and Institutional Ownership

28.7% of NGL Energy Partners shares are held by institutional investors. Comparatively, 88.5% of Targa Resources shares are held by institutional investors. 1.7% of Targa Resources shares are held 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.

Valuation and Earnings

This table compares NGL Energy Partners and Targa Resources’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
NGL Energy Partners $5.23 billion 0.05 -$639.82 million ($3.75) -0.58
Targa Resources $16.95 billion 1.06 $71.20 million ($0.11) -714.84

Targa Resources has higher revenue and earnings than NGL Energy Partners. Targa Resources is trading at a lower price-to-earnings ratio than NGL Energy Partners, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

NGL Energy Partners has a beta of 2.36, indicating that its stock price is 136% more volatile than the S&P 500. Comparatively, Targa Resources has a beta of 2.68, indicating that its stock price is 168% more volatile than the S&P 500.

Profitability

This table compares NGL Energy Partners and Targa Resources’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NGL Energy Partners -6.04% -28.00% -2.13%
Targa Resources 0.42% 9.74% 3.36%

Analyst Ratings

This is a summary of current ratings and recommmendations for NGL Energy Partners and Targa Resources, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NGL Energy Partners 1 0 0 0 1.00
Targa Resources 0 0 10 1 3.09

NGL Energy Partners currently has a consensus price target of $2.25, suggesting a potential upside of 2.74%. Targa Resources has a consensus price target of $70.45, suggesting a potential downside of 10.41%. Given NGL Energy Partners’ higher probable upside, equities research analysts plainly believe NGL Energy Partners is more favorable than Targa Resources.

Summary

Targa Resources beats NGL Energy Partners on 13 of the 14 factors compared between the two stocks.

NGL Energy Partners Company Profile (Get Rating)

NGL Energy Partners LP engages in the crude oil and liquids logistics, and water solution businesses. The company's Crude Oil Logistics segment purchases crude oil from producers and marketers, and transports it to refineries for resale at pipeline injection stations, storage terminals, barge loading facilities, rail facilities, refineries, and other trade hubs; and provides storage, terminaling, and pipeline transportation services. Its Water Solutions segment transports, treats, recycles, and disposes produced and flowback water generated from oil and natural gas production; disposes solids, such as tank bottoms, and drilling fluid and muds, as well as performs truck and frac tank washouts; and sells produced water for reuse and brackish non-potable water. The company's Liquids Logistics segment supplies natural gas liquids, refined petroleum products, and biodiesel to commercial, retail, and industrial customers in the United States and Canada through its 28 terminals, third-party storage and terminal facilities, and common carrier pipelines, as well as through fleet of leased railcars. This segment is also involved in the marine export of butane through its facility located in Chesapeake, Virginia; and offers terminaling and storage services. NGL Energy Holdings LLC serves as the general partner of the company. The company was founded in 1940 and is headquartered in Tulsa, Oklahoma.

Targa Resources Company Profile (Get Rating)

Targa Resources Corp. provides midstream natural gas and natural gas liquids services. It also provides gathering, storing, and terminaling crude oil, and storing, terminaling, and selling refined petroleum products. It operates through the following business segments: Gathering and Processing, and Logistics and Transportation. The Gathering and Processing segment includes assets used in the gathering of natural gas produced from oil and gas wells and processing this raw natural gas into merchantable natural gas by extracting NGLs and removing impurities, and assets used for crude oil gathering and terminaling. The Logistics and Transportation segment includes all the activities necessary to convert mixed NGLs into NGL products and provides certain value-added services such as the storing, fractionating, terminaling, transporting and marketing of NGLs and NGL products, including services to LPG exporters, and the storing and terminaling of refined petroleum products and crude oil and certain natural gas supply and marketing activities in support of its other businesses. The company was founded on October 27, 2005 and is headquartered in Houston, TX.

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