Reviewing CrossAmerica Partners (NYSE:CAPL) and Targa Resources (NYSE:TRGP)

CrossAmerica Partners (NYSE:CAPL) and Targa Resources (NYSE:TRGP) are both energy companies, but which is the superior investment? We will compare the two companies based on the strength of their analyst recommendations, risk, earnings, profitability, institutional ownership, valuation and dividends.

Dividends

CrossAmerica Partners pays an annual dividend of $2.10 per share and has a dividend yield of 10.1%. Targa Resources pays an annual dividend of $4.00 per share and has a dividend yield of 2.3%. CrossAmerica Partners pays out 262.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Targa Resources pays out 73.7% of its earnings in the form of a dividend. Targa Resources has raised its dividend for 5 consecutive years.

Analyst Ratings

This is a breakdown of recent ratings for CrossAmerica Partners and Targa Resources, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CrossAmerica Partners	0	0	0	0	0.00
Targa Resources	0	2	13	2	3.00

Targa Resources has a consensus price target of $209.57, suggesting a potential upside of 21.37%. Given Targa Resources’ stronger consensus rating and higher possible upside, analysts clearly believe Targa Resources is more favorable than CrossAmerica Partners.

Insider and Institutional Ownership

24.1% of CrossAmerica Partners shares are owned by institutional investors. Comparatively, 92.1% of Targa Resources shares are owned by institutional investors. 52.0% of CrossAmerica Partners shares are owned by insiders. Comparatively, 1.3% of Targa Resources shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
CrossAmerica Partners	0.80%	-45.12%	2.37%
Targa Resources	7.35%	30.48%	5.43%

Risk and Volatility

CrossAmerica Partners has a beta of 0.57, meaning that its share price is 43% less volatile than the S&P 500. Comparatively, Targa Resources has a beta of 1.07, meaning that its share price is 7% more volatile than the S&P 500.

Valuation & Earnings

This table compares CrossAmerica Partners and Targa Resources”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CrossAmerica Partners	$4.02 billion	0.20	$19.89 million	$0.80	25.87
Targa Resources	$16.38 billion	2.29	$1.28 billion	$5.43	31.80

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

Summary

Targa Resources beats CrossAmerica Partners on 16 of the 18 factors compared between the two stocks.

About CrossAmerica Partners

CrossAmerica Partners LP engages in the wholesale distribution of motor fuels, operation of convenience stores, and ownership and leasing of real estate used in the retail distribution of motor fuels in the United States. It operates in two segments, Wholesale and Retail. The Wholesale segment engages in the wholesale distribution of motor fuels to lessee dealers, independent dealers, commission agents, and company operated retail sites. The Retail segment is involved in the sale of convenience merchandise items; and retail sale of motor fuels at company operated retail sites and retail sites operated by commission agents. CrossAmerica GP LLC operates as the general partner of the company. The company was formerly known as Lehigh Gas Partners LP and changed its name to CrossAmerica Partners LP in October 2014. The company was founded in 1992 and is based in Allentown, Pennsylvania.

About Targa Resources

Targa Resources Corp., together with its subsidiary, Targa Resources Partners LP, owns, operates, acquires, and develops a portfolio of complementary domestic midstream infrastructure assets in North America. It operates in two segments, Gathering and Processing, and Logistics and Transportation. The company is involved in gathering, compressing, treating, processing, transporting, and selling natural gas; storing, fractionating, treating, transporting, and selling natural gas liquids (NGL) and NGL products, including services to liquefied petroleum gas exporters; and gathering, storing, terminaling, purchasing, and selling crude oil. It is also involved in the purchase and resale of NGL products; and sale 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. As of December 31, 2023, it leased and managed approximately 605 railcars; 137 tractors; and 6 vacuum trucks and 2 pressurized NGL barges. Targa Resources Corp. was incorporated in 2005 and is headquartered in Houston, Texas.