Critical Review: Crestwood Midstream Partners (CMLP) & Targa Resources (TRGP)
Crestwood Midstream Partners (NYSE: CMLP) and Targa Resources (NYSE:TRGP) are both oil & gas transportation services – nec companies, but which is the better investment? We will contrast the two businesses based on the strength of their institutional ownership, risk, valuation, analyst recommendations, dividends, earnings and profitability.
This table compares Crestwood Midstream Partners and Targa Resources’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Crestwood Midstream Partners||-0.22%||-1.34%||-0.17%|
Targa Resources pays an annual dividend of $3.64 per share and has a dividend yield of 8.3%. Crestwood Midstream Partners does not pay a dividend. Targa Resources pays out -136.8% of its earnings in the form of a dividend. Targa Resources has increased its dividend for 6 consecutive years.
Valuation & Earnings
This table compares Crestwood Midstream Partners and Targa Resources’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Crestwood Midstream Partners||N/A||N/A||N/A||($0.76)||-8.13|
|Targa Resources||$6.69 billion||1.41||-$187.30 million||($2.66)||-16.50|
Crestwood Midstream Partners has higher revenue, but lower earnings than Targa Resources. Targa Resources is trading at a lower price-to-earnings ratio than Crestwood Midstream Partners, indicating that it is currently the more affordable of the two stocks.
This is a summary of current ratings and recommmendations for Crestwood Midstream Partners and Targa Resources, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Crestwood Midstream Partners||0||0||0||0||N/A|
Targa Resources has a consensus price target of $54.41, indicating a potential upside of 23.97%. Given Targa Resources’ higher possible upside, analysts plainly believe Targa Resources is more favorable than Crestwood Midstream Partners.
Insider & Institutional Ownership
87.5% of Targa Resources shares are owned by institutional investors. 1.9% of Targa Resources shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Targa Resources beats Crestwood Midstream Partners on 10 of the 13 factors compared between the two stocks.
Crestwood Midstream Partners Company Profile
Crestwood Midstream Partners LP (Crestwood) develops, acquires, owns and operates primarily fee-based assets and operations within the energy midstream sector. The Company has three reporting segments: gathering and processing (G&P), providing natural gas gathering, processing, treating and compression services to producers in multiple unconventional shale plays; storage and transportation, which owns and operates natural gas storage facilities, and NGL and crude services, including crude oil rail terminals, the Arrow gathering system, its fleet of over-the-road crude oil and produced water transportation assets, an NGL storage facility, and US Salt, LLC. It provides infrastructure solutions across the value chain to service liquids-rich and crude oil shale plays across the United States. It owns and operates a portfolio of crude oil and natural gas gathering, processing, storage and transportation assets that connect fundamental energy supply with energy demand across North America.
Targa Resources Company Profile
Targa Resources Corp. is a midstream energy company in North America. It provides midstream services. Its segments include Gathering and Processing, and Logistics and Marketing (Downstream Business). It is engaged in the business of gathering, compressing, treating, processing and selling natural gas; storing, fractionating, treating, transporting and selling natural gas liquids (NGLs) and NGL products, including services to liquefied petroleum gas exporters; gathering, storing and terminalling crude oil, and storing, terminalling and selling refined petroleum products. The Gathering and Processing segment consists of gathering, compressing, dehydrating, treating, conditioning, processing, and marketing natural gas and gathering crude oil. The Logistics and Marketing segment includes all the activities necessary to convert mixed NGLs into NGL products and provides certain services, such as storing, fractionating, terminalling, transporting and marketing of NGLs and NGL products.
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