Teekay Tankers (NYSE:TNK) and Targa Resources (NYSE:TRGP) are both transportation companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, risk, valuation, dividends, earnings, profitability and institutional ownership.
Volatility and Risk
Teekay Tankers has a beta of 0.32, suggesting that its stock price is 68% less volatile than the S&P 500. Comparatively, Targa Resources has a beta of 2.99, suggesting that its stock price is 199% more volatile than the S&P 500.
Earnings and Valuation
This table compares Teekay Tankers and Targa Resources' top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
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Teekay Tankers | $920.97 million | 0.45 | $41.36 million | $1.91 | 6.44 |
Targa Resources | $8.67 billion | 0.82 | $-209,200,000.00 | ($0.81) | -38.62 |
Teekay Tankers has higher earnings, but lower revenue than Targa Resources. Targa Resources is trading at a lower price-to-earnings ratio than Teekay Tankers, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
28.9% of Teekay Tankers shares are held by institutional investors. Comparatively, 84.5% of Targa Resources shares are held by institutional investors. 1.5% of Targa Resources shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Profitability
This table compares Teekay Tankers and Targa Resources' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
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Teekay Tankers | 21.05% | 24.97% | 13.12% |
Targa Resources | -20.83% | 5.97% | 2.44% |
Analyst Recommendations
This is a breakdown of recent ratings and target prices for Teekay Tankers and Targa Resources, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
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Teekay Tankers | 1 | 2 | 2 | 0 | 2.20 |
Targa Resources | 0 | 3 | 16 | 1 | 2.90 |
Teekay Tankers presently has a consensus price target of $16.60, suggesting a potential upside of 34.96%. Targa Resources has a consensus price target of $32.50, suggesting a potential upside of 3.90%. Given Teekay Tankers' higher possible upside, equities analysts clearly believe Teekay Tankers is more favorable than Targa Resources.
Summary
Targa Resources beats Teekay Tankers on 8 of the 15 factors compared between the two stocks.