Targa Pipeline Partners (NYSE: APL) and Fairmount Santrol (NYSE:FMSA) are both energy companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, profitability, earnings, dividends, valuation, risk and institutional ownership.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Targa Pipeline Partners and Fairmount Santrol, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Targa Pipeline Partners 0 0 0 0 N/A
Fairmount Santrol 1 8 9 0 2.44

Fairmount Santrol has a consensus target price of $6.31, suggesting a potential upside of 28.97%. Given Fairmount Santrol’s higher probable upside, analysts clearly believe Fairmount Santrol is more favorable than Targa Pipeline Partners.

Profitability

This table compares Targa Pipeline Partners and Fairmount Santrol’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Targa Pipeline Partners 14.09% 17.87% 9.56%
Fairmount Santrol 1.69% 4.05% 0.86%

Institutional and Insider Ownership

75.4% of Fairmount Santrol shares are held by institutional investors. 9.8% of Fairmount Santrol shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Targa Pipeline Partners and Fairmount Santrol’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Targa Pipeline Partners N/A N/A N/A $0.89 30.02
Fairmount Santrol $535.01 million 2.05 -$140.19 million $0.06 81.50

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

Summary

Fairmount Santrol beats Targa Pipeline Partners on 5 of the 9 factors compared between the two stocks.

About Targa Pipeline Partners

Targa Pipeline Partners, L.P. (the Partnership), formerly Atlas Pipeline Partners, L.P., was formed by its parent, Targa Resources Corp., to own, operate, acquire and develop a diversified portfolio of complementary midstream energy assets. The Partnership is a provider of midstream natural gas, natural gas liquids (NGL), terminaling and crude oil gathering services in the United States. The Partnership is engaged in the business of gathering, compressing, treating, processing and selling natural gas; storing, fractionating, treating, transporting and selling NGLs and NGL products; gathering, storing and terminaling crude oil; and storing, terminaling and selling refined petroleum products.

About Fairmount Santrol

Fairmount Santrol Holdings Inc. is a provider of sand-based proppant solutions. The Company operates through two segments: Proppant Solutions, and Industrial & Recreational (I&R) Products. Its Proppant Solutions segment provides sand-based proppants for use in hydraulic fracturing operations throughout the United States and Canada, Argentina, Mexico, China, northern Europe and the United Arab Emirates. Its I&R segment provides raw, coated, and custom blended sands to the foundry, building products, glass, turf and landscape, and filtration industries in North America. Its asset base includes approximately 800 million tons of proven and probable mineral reserves. As of March 2017, the Company had 10 sand processing facilities with 16.8 million tons of annual sand processing capacity. Its coating facilities include operations in Mexico, Denmark and China, through which it serves international oil and gas markets.

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