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

Profitability

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

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

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Rose Rock Midstream and Targa Resources, as reported by MarketBeat.

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

Targa Resources has a consensus price target of $53.82, suggesting a potential upside of 22.08%. Given Targa Resources’ higher probable upside, analysts plainly believe Targa Resources is more favorable than Rose Rock Midstream.

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. Rose Rock Midstream has increased its dividend for 6 consecutive years and Targa Resources has increased its dividend for 5 consecutive years.

Institutional and Insider Ownership

83.0% of Targa Resources shares are owned by institutional investors. 1.9% of Targa Resources shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Risk & Volatility

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

Valuation & Earnings

This table compares Rose Rock Midstream and Targa Resources’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Rose Rock Midstream N/A N/A N/A N/A N/A
Targa Resources $7.65 billion 1.24 $1.02 billion N/A N/A

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

Summary

Targa Resources beats Rose Rock Midstream on 7 of the 11 factors compared between the two stocks.

Rose Rock Midstream Company Profile

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.

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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