Antero Midstream GP (NYSE: TGS) and Transportadora de Gas del Sur SA ADR Class B (NYSE:TGS) are both mid-cap oils/energy companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, earnings, institutional ownership, risk, dividends, analyst recommendations and profitability.

Institutional and Insider Ownership

77.0% of Antero Midstream GP shares are owned by institutional investors. Comparatively, 9.8% of Transportadora de Gas del Sur SA ADR Class B shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current recommendations for Antero Midstream GP and Transportadora de Gas del Sur SA ADR Class B, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Antero Midstream GP 0 5 5 0 2.50
Transportadora de Gas del Sur SA ADR Class B 0 1 1 0 2.50

Antero Midstream GP presently has a consensus target price of $22.70, indicating a potential upside of 23.71%. Transportadora de Gas del Sur SA ADR Class B has a consensus target price of $25.00, indicating a potential upside of 89.54%. Given Transportadora de Gas del Sur SA ADR Class B’s higher probable upside, analysts plainly believe Transportadora de Gas del Sur SA ADR Class B is more favorable than Antero Midstream GP.

Profitability

This table compares Antero Midstream GP and Transportadora de Gas del Sur SA ADR Class B’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Antero Midstream GP 32.91% 199.85% 102.79%
Transportadora de Gas del Sur SA ADR Class B 23.69% 70.24% 25.44%

Earnings and Valuation

This table compares Antero Midstream GP and Transportadora de Gas del Sur SA ADR Class B’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Antero Midstream GP $69.72 million 49.01 $2.32 million $0.03 611.67
Transportadora de Gas del Sur SA ADR Class B $742.27 million 2.82 $168.71 million $1.07 12.33

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

Dividends

Antero Midstream GP pays an annual dividend of $0.50 per share and has a dividend yield of 2.7%. Transportadora de Gas del Sur SA ADR Class B pays an annual dividend of $0.28 per share and has a dividend yield of 2.1%. Antero Midstream GP pays out 1,666.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Transportadora de Gas del Sur SA ADR Class B pays out 26.2% of its earnings in the form of a dividend.

Volatility & Risk

Antero Midstream GP has a beta of 2.03, indicating that its share price is 103% more volatile than the S&P 500. Comparatively, Transportadora de Gas del Sur SA ADR Class B has a beta of 1.35, indicating that its share price is 35% more volatile than the S&P 500.

Summary

Antero Midstream GP beats Transportadora de Gas del Sur SA ADR Class B on 9 of the 14 factors compared between the two stocks.

About Antero Midstream GP

Antero Midstream GP LP owns, operates, and develops midstream energy assets in the Marcellus and Utica Shales in West Virginia and Ohio. Its assets consist of gathering pipelines, compressor stations, interests in processing and fractionation plants, and water handling and treatment assets, which provide midstream services to Antero Resources Corporation under long term fixed fee contracts. The company was formerly known as Antero Resources Midstream Management LLC and changed its name to Antero Midstream GP LP in May 2017. Antero Midstream GP LP was founded in 2013 and is based in Denver, Colorado.

About Transportadora de Gas del Sur SA ADR Class B

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.

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