Head-To-Head Survey: Targa Resources Partners (NGLS) & Hess (HES)

Targa Resources Partners (NYSE: NGLS) and Hess (NYSE:HES) are both mid-cap oil & gas refining and marketing – nec companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, earnings, analyst recommendations, valuation, dividends, risk and profitability.

Profitability

This table compares Targa Resources Partners and Hess’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Targa Resources Partners 3.27% 0.29% 1.61%
Hess -113.21% -9.30% -5.05%

Analyst Ratings

This is a summary of recent ratings and recommmendations for Targa Resources Partners and Hess, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Targa Resources Partners 0 0 0 0 N/A
Hess 1 9 6 0 2.31

Hess has a consensus target price of $51.70, indicating a potential upside of 15.93%. Given Hess’ higher possible upside, analysts plainly believe Hess is more favorable than Targa Resources Partners.

Insider & Institutional Ownership

89.7% of Hess shares are owned by institutional investors. 11.8% of Hess shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

Targa Resources Partners pays an annual dividend of $3.30 per share and has a dividend yield of 31.0%. Hess pays an annual dividend of $1.00 per share and has a dividend yield of 2.2%. Targa Resources Partners pays out 423.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Hess pays out -5.0% of its earnings in the form of a dividend. Hess has raised its dividend for 7 consecutive years.

Earnings & Valuation

This table compares Targa Resources Partners and Hess’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Targa Resources Partners N/A N/A N/A $0.78 13.65
Hess $4.84 billion 2.93 -$6.13 billion ($20.20) -2.21

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

Summary

Hess beats Targa Resources Partners on 7 of the 12 factors compared between the two stocks.

About Targa Resources Partners

Targa Resources Partners LP is a provider of midstream natural gas and natural gas liquid (NGL) services in the United States with a presence in crude oil gathering and petroleum terminaling. The Company is engaged in the business of gathering, compressing, treating, processing and selling natural gas; storing, fractionating, treating, transporting and selling NGLs and NGL products, including services to liquefied petroleum gas (LPG) exporters; gathering, storing and terminaling crude oil, and storing, terminaling and selling refined petroleum products. The Company operates in two divisions: Gathering and Processing, and Logistics and Marketing. The Gathering and Processing division consists of two segments: Field Gathering and Processing, and Coastal Gathering and Processing. The Logistics and Marketing division consists of two segments: Logistics Assets and Marketing and Distribution.

About Hess

Hess Corporation is an exploration and production company. The Company is engaged in exploration, development, production, transportation, purchase and sale of crude oil, natural gas liquids (NGL) and natural gas. The Company’s segments include Exploration and Production, and Bakken Midstream. Its Exploration and Production segment explores for, develops, produces, purchases and sells crude oil, NGLs and natural gas with production operations primarily in the United States, Denmark, Equatorial Guinea, the Malaysia/Thailand Joint Development Area (JDA), Malaysia and Norway. The Bakken Midstream segment provides fee-based services, including crude oil and natural gas gathering, processing of natural gas and the fractionation of NGLs, transportation of crude oil by rail car, terminaling and loading crude oil and NGLs, and the storage and terminaling of propane, primarily in the Bakken shale play of North Dakota.

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