Analyzing Vaalco Energy (NYSE:EGY) and Transportadora De Gas Sa Ord B (NYSE:TGS)

Transportadora De Gas Sa Ord B (NYSE:TGS) and Vaalco Energy (NYSE:EGY) are both energy companies, but which is the better stock? We will contrast the two companies based on the strength of their profitability, institutional ownership, valuation, earnings, dividends, analyst recommendations and risk.

Volatility & Risk

Transportadora De Gas Sa Ord B has a beta of 0.59, suggesting that its share price is 41% less volatile than the S&P 500. Comparatively, Vaalco Energy has a beta of 0.14, suggesting that its share price is 86% less volatile than the S&P 500.

Valuation and Earnings

This table compares Transportadora De Gas Sa Ord B and Vaalco Energy”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Transportadora De Gas Sa Ord B	$1,840.62 billion	0.00	$336.69 million	$2.61	10.40
Vaalco Energy	$359.27 million	1.74	-$41.39 million	($1.06)	-5.61

Transportadora De Gas Sa Ord B has higher revenue and earnings than Vaalco Energy. Vaalco Energy is trading at a lower price-to-earnings ratio than Transportadora De Gas Sa Ord B, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

3.3% of Transportadora De Gas Sa Ord B shares are held by institutional investors. Comparatively, 50.3% of Vaalco Energy shares are held by institutional investors. 3.0% of Vaalco Energy shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings for Transportadora De Gas Sa Ord B and Vaalco Energy, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Transportadora De Gas Sa Ord B	0	2	1	0	2.33
Vaalco Energy	1	1	0	0	1.50

Transportadora De Gas Sa Ord B presently has a consensus price target of $39.00, indicating a potential upside of 43.70%. Vaalco Energy has a consensus price target of $7.30, indicating a potential upside of 22.79%. Given Transportadora De Gas Sa Ord B’s stronger consensus rating and higher possible upside, equities analysts clearly believe Transportadora De Gas Sa Ord B is more favorable than Vaalco Energy.

Dividends

Transportadora De Gas Sa Ord B pays an annual dividend of $0.92 per share and has a dividend yield of 3.4%. Vaalco Energy pays an annual dividend of $0.25 per share and has a dividend yield of 4.2%. Transportadora De Gas Sa Ord B pays out 35.2% of its earnings in the form of a dividend. Vaalco Energy pays out -23.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Vaalco Energy is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Transportadora De Gas Sa Ord B and Vaalco Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Transportadora De Gas Sa Ord B	27.38%	16.29%	10.07%
Vaalco Energy	-31.11%	-14.36%	-6.41%

Summary

Transportadora De Gas Sa Ord B beats Vaalco Energy on 11 of the 16 factors compared between the two stocks.

About Transportadora De Gas Sa Ord B

Transportadora de Gas del Sur S.A. engages in transportation of natural gas, and production and commercialization of natural gas liquids in Argentina and internationally. The company operates through four segments: Natural Gas Transportation Services; Liquids Production and Commercialization; Midstream; and Telecommunications. The Natural Gas Transportation segment transports natural gas through pipeline system to distribution companies, power plants, and industrial customers. It 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, liquid petroleum gas, natural gasoline, propane, and butane. This segment offers certain related services comprising reception, storage, and dispatch of the liquids. The Midstream segment provides natural gas conditioning services; treatment, removal of impurities and natural gas compression, including the collection and transport of natural gas; and inspection and maintenance of pipelines and compressor plants services. In addition, this segment offers steam generation for electricity production and management services for expansion works and steam generation for the production of electricity. The Telecommunications segment offers data transmission services through a network of digital terrestrial radio relay. It serves residential, commercial, industrial, and electric power generation end users. The company was incorporated 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 Vaalco Energy

VAALCO Energy, Inc., an independent energy company, engages in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in Gabon, Egypt, Equatorial Guinea, and Canada. The company holds 58.8% interest in the Etame production sharing contract related to the Etame Marin block covering an area of approximately 46,200 gross acres located offshore in the Republic of Gabon in West Africa. It also owns 100% interest in the Eastern Desert, which contains West Gharib, West Bakr and North West Gharib merged concessions covering as area of approximately 45,067 acres, as well as Western Desert, which contains the South Ghazalat concession covering as area of approximately 7,340 acres located in Egypt. In addition, the company production and working interests in Cardium light oil and Mannville liquids-rich gas assets covering as area of 47,400 gross acres located near the north of Calgary, Alberta; and an undeveloped block offshore Equatorial Guinea, West Africa. VAALCO Energy, Inc. was incorporated in 1985 and is headquartered in Houston, Texas.