Phillips 66 (NYSE: PSX) and Targa Resources Partners (NYSE:NGLS) are both oils/energy companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, earnings, risk, analyst recommendations, profitability, dividends and valuation.

Earnings and Valuation

This table compares Phillips 66 and Targa Resources Partners’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Phillips 66 $79.20 billion 0.55 $2.21 billion $3.35 25.59
Targa Resources Partners N/A N/A N/A N/A N/A

Phillips 66 has higher revenue and earnings than Targa Resources Partners.

Dividends

Phillips 66 pays an annual dividend of $2.80 per share and has a dividend yield of 3.3%. Targa Resources Partners does not pay a dividend. Phillips 66 pays out 83.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Phillips 66 has raised its dividend for 7 consecutive years and Targa Resources Partners has raised its dividend for 5 consecutive years.

Profitability

This table compares Phillips 66 and Targa Resources Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Phillips 66 1.87% 6.29% 2.93%
Targa Resources Partners 3.27% 0.29% 1.61%

Insider & Institutional Ownership

69.6% of Phillips 66 shares are owned by institutional investors. 0.5% of Phillips 66 shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current recommendations and price targets for Phillips 66 and Targa Resources Partners, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Phillips 66 0 7 3 0 2.30
Targa Resources Partners 0 1 3 0 2.75

Phillips 66 currently has a consensus price target of $82.78, indicating a potential downside of 3.44%. Targa Resources Partners has a consensus price target of $52.75, indicating a potential upside of 395.31%. Given Targa Resources Partners’ stronger consensus rating and higher probable upside, analysts plainly believe Targa Resources Partners is more favorable than Phillips 66.

Summary

Phillips 66 beats Targa Resources Partners on 8 of the 12 factors compared between the two stocks.

About Phillips 66

Phillips 66 is an energy manufacturing and logistics company with midstream, chemicals, refining, and marketing and specialties businesses. The Company operates through four segments: Midstream, Chemicals, Refining, and Marketing and Specialties (M&S). The Midstream segment gathers, processes, transports and markets natural gas, and transports, stores, fractionates and markets natural gas liquids (NGLs) in the United States. The Chemicals segment consists of its equity investment in Chevron Phillips Chemical Company LLC (CPChem), which manufactures and markets petrochemicals and plastics. The Refining segment buys, sells and refines crude oil and other feedstocks at refineries in the United States and Europe. The M&S segment purchases for resale and markets refined petroleum products, such as gasolines, distillates and aviation fuels, primarily in the United States and Europe, as well as includes the manufacturing and marketing of specialty products, and power generation operations.

About Targa Resources Partners

Targa Resources Partners LP is a provider of midstream natural gas and natural gas liquid (NGL) services in the United States with a presence in crude oil gathering and petroleum terminaling. The Company is engaged in the business of gathering, compressing, treating, processing and selling natural gas; storing, fractionating, treating, transporting and selling NGLs and NGL products, including services to liquefied petroleum gas (LPG) exporters; gathering, storing and terminaling crude oil, and storing, terminaling and selling refined petroleum products. The Company operates in two divisions: Gathering and Processing, and Logistics and Marketing. The Gathering and Processing division consists of two segments: Field Gathering and Processing, and Coastal Gathering and Processing. The Logistics and Marketing division consists of two segments: Logistics Assets and Marketing and Distribution.

Receive News & Stock Ratings for Phillips 66 Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Phillips 66 and related stocks with our FREE daily email newsletter.