Critical Contrast: Targa Resources Partners (NGLS) & Alon USA Partners, (ALDW)

Targa Resources Partners (NYSE: NGLS) and Alon USA Partners, (NYSE:ALDW) are both small-cap energy companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, valuation, institutional ownership, risk, profitability, dividends and analyst recommendations.

Analyst Ratings

This is a breakdown of recent recommendations for Targa Resources Partners and Alon USA Partners,, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Targa Resources Partners 0 1 3 0 2.75
Alon USA Partners, 0 2 3 0 2.60

Targa Resources Partners currently has a consensus target price of $52.75, indicating a potential upside of 395.31%. Alon USA Partners, has a consensus target price of $12.25, indicating a potential upside of 6.71%. Given Targa Resources Partners’ stronger consensus rating and higher possible upside, equities research analysts plainly believe Targa Resources Partners is more favorable than Alon USA Partners,.

Profitability

This table compares Targa Resources Partners and Alon USA Partners,’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Targa Resources Partners 3.27% 0.29% 1.61%
Alon USA Partners, 2.20% 40.06% 5.91%

Insider and Institutional Ownership

5.3% of Alon USA Partners, shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Targa Resources Partners and Alon USA Partners,’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Targa Resources Partners N/A N/A N/A N/A N/A
Alon USA Partners, $2.04 billion 0.35 $136.33 million $0.71 16.17

Alon USA Partners, has higher revenue and earnings than Targa Resources Partners.

Dividends

Alon USA Partners, pays an annual dividend of $1.40 per share and has a dividend yield of 12.2%. Targa Resources Partners does not pay a dividend. Alon USA Partners, pays out 197.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Targa Resources Partners has increased its dividend for 2 consecutive years and Alon USA Partners, has increased its dividend for 7 consecutive years.

Summary

Alon USA Partners, beats Targa Resources Partners on 7 of the 11 factors compared between the two stocks.

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.

About Alon USA Partners,

Alon USA Partners, LP (Alon) is engaged principally in the business of operating a crude oil refinery in Big Spring, Texas. The Company had a crude oil throughput capacity of 73,000 barrels per day, which the Company referred to as its Big Spring refinery, as of December 31, 2016. The Company refines crude oil into finished products, which the Company markets primarily in Central and West Texas, Oklahoma, New Mexico and Arizona through its integrated wholesale distribution network to retail convenience stores and other third-party distributors. Its Big Spring refinery is located on 1,306 acres in the Permian Basin in West Texas. Major processes at its Big Spring refinery include fluid catalytic cracking, naphtha reforming, vacuum distillation, hydrotreating, aromatic extraction and alkylation. The Company is managed and operated by Alon USA Partners GP, LLC (General Partner), an indirect subsidiary of Alon USA Energy, Inc. (Alon Energy), which is its parent company.

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