DCP Midstream (DCP) and Transportadora de Gas del Sur (NYSE:TGS) Critical Analysis

Transportadora de Gas del Sur (NYSE: TGS) and DCP Midstream (NYSE:DCP) are both mid-cap oils/energy companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, risk, earnings, valuation and analyst recommendations.

Volatility and Risk

Transportadora de Gas del Sur has a beta of 1.17, meaning that its stock price is 17% more volatile than the S&P 500. Comparatively, DCP Midstream has a beta of 2.12, meaning that its stock price is 112% more volatile than the S&P 500.

Profitability

This table compares Transportadora de Gas del Sur and DCP Midstream’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Transportadora de Gas del Sur 25.94% 72.93% 28.68%
DCP Midstream 2.24% 3.08% 1.57%

Earnings & Valuation

This table compares Transportadora de Gas del Sur and DCP Midstream’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Transportadora de Gas del Sur $742.27 million 2.86 $168.71 million $1.07 12.47
DCP Midstream $8.46 billion 0.65 $229.00 million $0.53 72.83

DCP Midstream has higher revenue and earnings than Transportadora de Gas del Sur. Transportadora de Gas del Sur is trading at a lower price-to-earnings ratio than DCP Midstream, indicating that it is currently the more affordable of the two stocks.

Dividends

DCP Midstream pays an annual dividend of $3.12 per share and has a dividend yield of 8.1%. Transportadora de Gas del Sur does not pay a dividend. DCP Midstream pays out 588.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Insider & Institutional Ownership

9.2% of Transportadora de Gas del Sur shares are held by institutional investors. Comparatively, 54.5% of DCP Midstream shares are held by institutional investors. 0.0% of DCP Midstream shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent recommendations for Transportadora de Gas del Sur and DCP Midstream, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Transportadora de Gas del Sur 1 1 0 0 1.50
DCP Midstream 2 5 4 0 2.18

Transportadora de Gas del Sur presently has a consensus price target of $25.00, indicating a potential upside of 87.41%. DCP Midstream has a consensus price target of $39.73, indicating a potential upside of 2.92%. Given Transportadora de Gas del Sur’s higher probable upside, equities research analysts plainly believe Transportadora de Gas del Sur is more favorable than DCP Midstream.

Summary

DCP Midstream beats Transportadora de Gas del Sur on 9 of the 16 factors compared between the two stocks.

About Transportadora de Gas del Sur

Transportadora de Gas del Sur S.A. provides natural gas transportation and distribution services in Argentina. The company operates through four segments: Natural Gas Transportation, Liquids Production and Commercialization, Other Services, and Telecommunications. The Natural Gas Transportation segment transports natural gas through 5,706 miles of pipeline system to distribution companies, power plants, and industrial customers. As of December 31, 2017, it served 6.1 million residential, commercial, industrial, and electric power generation end-users. It also provides operation and maintenance services for the natural gas transportation facilities. The Liquids Production and Commercialization segment produces and commercializes natural gas liquids, such as ethane, LPG, natural gasoline, propane, and butane in Argentina and internationally. The Other Services segment offers midstream services, including natural gas treatment, separation, and removal of impurities from the natural gas stream, as well as natural gas compression. It also provides services related to pipeline and compression plant construction, operation, and maintenance; and generates steam for electricity production. The Telecommunications segment provides telecommunication services for telecommunication operators and corporate customers. Its telecommunication network includes a microwave digital network with synchronous digital hierarchy technology and a dark fiber optic network. The company was founded in 1992 and is headquartered in Buenos Aires, Argentina. Transportadora de Gas del Sur S.A. is a subsidiary of Compañía de Inversiones de Energía S.A.

About DCP Midstream

DCP Midstream, LP, together with its subsidiaries, owns, operates, acquires, and develops a portfolio of midstream energy assets in the United States. The company operates in two segments, Gathering and Processing, and Logistics and Marketing. The Gathering and Processing segment is involved in gathering, compressing, treating, and processing natural gas; producing and fractionating natural gas liquids (NGLs); and recovering condensate. The Logistics and Marketing segment engages in transporting, trading, marketing, and storing natural gas and NGLs; fractionating NGLs; and wholesale propane logistics. As of February 13, 2018, it owned and operated approximately 60 plants and 63,000 miles of natural gas and NGLs pipelines with operations in 17 states. The company serves petrochemical and refining companies, and retail propane distributors. DCP Midstream GP, LP serves as the general partner of the company. The company was formerly known as DCP Midstream Partners, LP and changed its name to DCP Midstream, LP in January 2017. DCP Midstream, LP was founded in 2005 and is headquartered in Denver, Colorado.

Receive News & Ratings for Transportadora de Gas del Sur Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Transportadora de Gas del Sur and related companies with MarketBeat.com's FREE daily email newsletter.

Leave a Reply