Reviewing Targa Resources (TRGP) & The Competition

Targa Resources (NYSE:TRGP) is one of 1,051 public companies in the “Oil, Gas & Consumable Fuels” industry, but how does it weigh in compared to its competitors? We will compare Targa Resources to related companies based on the strength of its earnings, valuation, institutional ownership, dividends, profitability, risk and analyst recommendations.

Volatility and Risk

Targa Resources has a beta of 0.76, indicating that its stock price is 24% less volatile than the S&P 500. Comparatively, Targa Resources’ competitors have a beta of -3.65, indicating that their average stock price is 465% less volatile than the S&P 500.

Institutional & Insider Ownership

92.1% of Targa Resources shares are held by institutional investors. Comparatively, 30.8% of shares of all “Oil, Gas & Consumable Fuels” companies are held by institutional investors. 1.4% of Targa Resources shares are held by insiders. Comparatively, 15.3% of shares of all “Oil, Gas & Consumable Fuels” companies are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Targa Resources and its competitors gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Targa Resources	$17.03 billion	$1.84 billion	25.30
Targa Resources Competitors	$10.86 billion	$5.51 billion	-0.83

Targa Resources has higher revenue, but lower earnings than its competitors. Targa Resources is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Analyst Recommendations

This is a summary of current ratings for Targa Resources and its competitors, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Targa Resources	0	0	20	2	3.09
Targa Resources Competitors	5981	26987	40848	2421	2.52

Targa Resources currently has a consensus price target of $325.58, suggesting a potential upside of 23.02%. As a group, “Oil, Gas & Consumable Fuels” companies have a potential upside of 29.03%. Given Targa Resources’ competitors higher probable upside, analysts clearly believe Targa Resources has less favorable growth aspects than its competitors.

Profitability

This table compares Targa Resources and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Targa Resources	13.55%	69.26%	8.64%
Targa Resources Competitors	-457.98%	19.26%	6.33%

Dividends

Targa Resources pays an annual dividend of $5.00 per share and has a dividend yield of 1.9%. Targa Resources pays out 47.8% of its earnings in the form of a dividend. As a group, “Oil, Gas & Consumable Fuels” companies pay a dividend yield of 9.2% and pay out -131.6% of their earnings in the form of a dividend. Targa Resources has raised its dividend for 5 consecutive years. Targa Resources lags its competitors as a dividend stock, given its lower dividend yield and higher payout ratio.

Summary

Targa Resources beats its competitors on 10 of the 15 factors compared.

About Targa Resources

Targa Resources Corp., together with its subsidiary, Targa Resources Partners LP, owns, operates, acquires, and develops a portfolio of complementary domestic midstream infrastructure assets in North America. It operates in two segments, Gathering and Processing, and Logistics and Transportation. The company is involved in gathering, compressing, treating, processing, transporting, and selling natural gas; storing, fractionating, treating, transporting, and selling natural gas liquids (NGL) and NGL products, including services to liquefied petroleum gas exporters; and gathering, storing, terminaling, purchasing, and selling crude oil. It is also involved in the purchase and resale of NGL products; and sale of propane, as well as provision of related logistics services to multi-state retailers, independent retailers, and other end-users. In addition, the company offers NGL balancing services; and transportation services to refineries and petrochemical companies in the Gulf Coast area, as well as purchases, markets, and resells natural gas. As of December 31, 2023, it leased and managed approximately 605 railcars; 137 tractors; and 6 vacuum trucks and 2 pressurized NGL barges. Targa Resources Corp. was incorporated in 2005 and is headquartered in Houston, Texas.