Targa Resources (NYSE:TRGP) and The Williams Companies (NYSE:WMB) are both oils/energy companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, valuation, profitability, analyst recommendations, dividends, institutional ownership and risk.
Valuation and Earnings
This table compares Targa Resources and The Williams Companies' revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
Targa Resources | $8.67 billion | 0.82 | $-209,200,000.00 | ($0.81) | -38.19 |
The Williams Companies | $8.20 billion | 3.38 | $850 million | $0.99 | 23.07 |
The Williams Companies has lower revenue, but higher earnings than Targa Resources. Targa Resources is trading at a lower price-to-earnings ratio than The Williams Companies, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Targa Resources has a beta of 2.99, indicating that its stock price is 199% more volatile than the S&P 500. Comparatively, The Williams Companies has a beta of 1.72, indicating that its stock price is 72% more volatile than the S&P 500.
Dividends
Targa Resources pays an annual dividend of $0.40 per share and has a dividend yield of 1.3%. The Williams Companies pays an annual dividend of $1.60 per share and has a dividend yield of 7.0%. Targa Resources pays out -49.4% of its earnings in the form of a dividend. The Williams Companies pays out 161.6% 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 has increased its dividend for 1 consecutive years and The Williams Companies has increased its dividend for 1 consecutive years.
Institutional & Insider Ownership
84.5% of Targa Resources shares are held by institutional investors. Comparatively, 83.6% of The Williams Companies shares are held by institutional investors. 1.5% of Targa Resources shares are held by company insiders. Comparatively, 0.3% of The Williams Companies shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Analyst Ratings
This is a breakdown of current recommendations and price targets for Targa Resources and The Williams Companies, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
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Targa Resources | 0 | 4 | 15 | 1 | 2.85 |
The Williams Companies | 0 | 2 | 12 | 1 | 2.93 |
Targa Resources presently has a consensus price target of $30.1111, suggesting a potential downside of 2.65%. The Williams Companies has a consensus price target of $23.8571, suggesting a potential upside of 4.45%. Given The Williams Companies' stronger consensus rating and higher probable upside, analysts plainly believe The Williams Companies is more favorable than Targa Resources.
Profitability
This table compares Targa Resources and The Williams Companies' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
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Targa Resources | -20.83% | 5.97% | 2.44% |
The Williams Companies | 1.86% | 7.77% | 2.70% |
Summary
The Williams Companies beats Targa Resources on 10 of the 16 factors compared between the two stocks.