Targa Resources (NYSE: TRGP) and Rose Rock Midstream (NYSE:RRMS) are both oils/energy companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, valuation, risk, dividends, analyst recommendations, institutional ownership and earnings.

Earnings and Valuation

This table compares Targa Resources and Rose Rock Midstream’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Targa Resources $7.65 billion 1.23 $1.02 billion N/A N/A
Rose Rock Midstream N/A N/A N/A N/A N/A

Targa Resources has higher revenue and earnings than Rose Rock Midstream.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Targa Resources and Rose Rock Midstream, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Targa Resources 0 6 11 1 2.72
Rose Rock Midstream 0 0 0 0 N/A

Targa Resources presently has a consensus target price of $53.82, suggesting a potential upside of 23.08%. Given Targa Resources’ higher probable upside, equities research analysts plainly believe Targa Resources is more favorable than Rose Rock Midstream.

Profitability

This table compares Targa Resources and Rose Rock Midstream’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Targa Resources -2.92% -3.45% -1.59%
Rose Rock Midstream 5.87% 8.49% 3.12%

Dividends

Targa Resources pays an annual dividend of $3.64 per share and has a dividend yield of 8.3%. Rose Rock Midstream does not pay a dividend. Targa Resources has raised its dividend for 6 consecutive years and Rose Rock Midstream has raised its dividend for 5 consecutive years.

Risk and Volatility

Targa Resources has a beta of 2.21, indicating that its share price is 121% more volatile than the S&P 500. Comparatively, Rose Rock Midstream has a beta of 2.21, indicating that its share price is 121% more volatile than the S&P 500.

Insider and Institutional Ownership

87.8% of Targa Resources shares are held by institutional investors. 1.9% of Targa Resources shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

Targa Resources beats Rose Rock Midstream on 8 of the 11 factors compared between the two stocks.

About Targa Resources

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.

About Rose Rock Midstream

Rose Rock Midstream, L.P. owns, operates, develops and acquires diversified portfolio of midstream energy assets. The Company is engaged in providing midstream energy related services, such as crude oil gathering, transportation, storage, distribution and marketing in Colorado, Kansas, Minnesota, Montana, North Dakota, Ohio, Oklahoma, Pennsylvania, Texas and Wyoming. Its segments include Transportation, Facilities, and Supply and Logistics. Its Transportation segment operates crude oil pipelines and truck transportation businesses in the United States. Its Facilities segment operates crude oil storage and terminal businesses in the United States. Its Supply and Logistics segment operates a crude oil marketing and blending business in the United States. The Company operates in the Bakken Shale in North Dakota and Montana, the Denver-Julesburg Basin (DJ Basin) and the Niobrara Shale in the Rocky Mountain region, and the Granite Wash and Mississippi Lime Play in the Mid-Continent region.

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