Financial Analysis: Targa Resources (TRGP) versus Buckeye Partners L.P. (BPL)
Buckeye Partners L.P. (NYSE: BPL) and Targa Resources (NYSE:TRGP) are both mid-cap oils/energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, valuation, risk, analyst recommendations, earnings, dividends and profitability.
Institutional and Insider Ownership
68.8% of Buckeye Partners L.P. shares are owned by institutional investors. Comparatively, 87.4% of Targa Resources shares are owned by institutional investors. 0.4% of Buckeye Partners L.P. shares are owned by company insiders. Comparatively, 1.9% of Targa Resources shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Buckeye Partners L.P. pays an annual dividend of $5.05 per share and has a dividend yield of 9.1%. Targa Resources pays an annual dividend of $3.64 per share and has a dividend yield of 7.7%. Buckeye Partners L.P. pays out 138.4% 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 -183.8% of its earnings in the form of a dividend. Buckeye Partners L.P. has raised its dividend for 6 consecutive years and Targa Resources has raised its dividend for 14 consecutive years.
Earnings and Valuation
This table compares Buckeye Partners L.P. and Targa Resources’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Buckeye Partners L.P.||$3.47 billion||2.27||$979.66 million||$3.65||15.26|
|Targa Resources||$7.65 billion||1.33||$1.02 billion||($1.98)||-23.85|
Targa Resources has higher revenue and earnings than Buckeye Partners L.P.. Targa Resources is trading at a lower price-to-earnings ratio than Buckeye Partners L.P., indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
Buckeye Partners L.P. has a beta of 1.14, meaning that its stock price is 14% more volatile than the S&P 500. Comparatively, Targa Resources has a beta of 2.22, meaning that its stock price is 122% more volatile than the S&P 500.
This is a breakdown of current ratings and target prices for Buckeye Partners L.P. and Targa Resources, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Buckeye Partners L.P.||0||8||1||0||2.11|
Buckeye Partners L.P. currently has a consensus price target of $70.78, suggesting a potential upside of 27.09%. Targa Resources has a consensus price target of $54.38, suggesting a potential upside of 15.13%. Given Buckeye Partners L.P.’s higher possible upside, analysts clearly believe Buckeye Partners L.P. is more favorable than Targa Resources.
This table compares Buckeye Partners L.P. and Targa Resources’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Buckeye Partners L.P.||14.42%||11.04%||5.29%|
Targa Resources beats Buckeye Partners L.P. on 10 of the 17 factors compared between the two stocks.
About Buckeye Partners L.P.
Buckeye Partners, L.P. (Buckeye) owns and operates a network of integrated assets providing midstream logistic solutions, primarily consisting of the transportation, storage, processing and marketing of liquid petroleum products. Its segments include Domestic Pipelines & Terminals, Global Marine Terminals and Merchant Services. As of December 31, 2016, the Domestic Pipelines & Terminals segment owned and operated approximately 6,000 miles of pipeline located primarily in the northeastern and upper Midwestern portions of the United States, and serviced approximately 110 delivery locations. The Global Marine Terminals segment provides marine accessible bulk storage and blending services, rail and truck rack loading/unloading, along with petroleum processing services in the East Coast and Gulf Coast regions of the United States and in the Caribbean. The Merchant Services segment is a wholesale distributor of petroleum products in the continental United States and in the Caribbean.
About Targa Resources
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.
Receive News & Ratings for Buckeye Partners L.P. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Buckeye Partners L.P. and related companies with MarketBeat.com's FREE daily email newsletter.