Reviewing CSI Compressco (CCLP) & Targa Pipeline Partners (APL)

CSI Compressco (NASDAQ: CCLP) and Targa Pipeline Partners (NYSE:APL) are both oils/energy companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, earnings, valuation, risk, profitability and dividends.

Profitability

This table compares CSI Compressco and Targa Pipeline Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CSI Compressco -14.20% -35.88% -5.70%
Targa Pipeline Partners 14.09% 17.87% 9.56%

Dividends

CSI Compressco pays an annual dividend of $0.75 per share and has a dividend yield of 11.6%. Targa Pipeline Partners does not pay a dividend. CSI Compressco pays out -60.0% of its earnings in the form of a dividend.

Insider and Institutional Ownership

27.4% of CSI Compressco shares are held by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Valuation and Earnings

This table compares CSI Compressco and Targa Pipeline Partners’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
CSI Compressco $311.36 million 0.75 -$138.13 million ($1.25) -5.18
Targa Pipeline Partners N/A N/A N/A $0.89 30.02

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

Analyst Ratings

This is a breakdown of recent ratings and target prices for CSI Compressco and Targa Pipeline Partners, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CSI Compressco 1 3 0 0 1.75
Targa Pipeline Partners 0 0 0 0 N/A

CSI Compressco presently has a consensus price target of $6.00, indicating a potential downside of 7.41%. Given CSI Compressco’s higher probable upside, equities analysts plainly believe CSI Compressco is more favorable than Targa Pipeline Partners.

Summary

CSI Compressco beats Targa Pipeline Partners on 5 of the 9 factors compared between the two stocks.

CSI Compressco Company Profile

CSI Compressco LP is a provider of compression services and equipment for natural gas and oil production, gathering, transportation, processing and storage. The Company sells custom-designed compressor packages and oilfield fluid pump systems, and provides aftermarket services and compressor package parts and components manufactured by third-party suppliers. It provides these compression services and equipment to a base of natural gas and oil exploration and production, midstream and transmission companies operating throughout many of the onshore producing regions of the United States, as well as in a number of foreign countries, including Mexico, Canada and Argentina. It is a service provider of natural gas compression services in the United States, utilizing its fleet of compressor packages that employs a spectrum of low-, medium- and high-horsepower engines. As of December 31, 2016, its fleet included approximately 6,000 compressor packages.

Targa Pipeline Partners Company Profile

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.

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