Transportadora de Gas del Sur (NYSE:TGS) and EnLink Midstream (NYSE:ENLC) are both oils/energy companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, dividends, profitability, institutional ownership, analyst recommendations, risk and valuation.
Insider & Institutional Ownership
9.4% of Transportadora de Gas del Sur shares are held by institutional investors. Comparatively, 48.9% of EnLink Midstream shares are held by institutional investors. 1.5% of EnLink Midstream shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
This is a breakdown of current ratings and price targets for Transportadora de Gas del Sur and EnLink Midstream, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Transportadora de Gas del Sur||1||0||1||0||2.00|
EnLink Midstream has a consensus price target of $13.50, suggesting a potential upside of 79.05%. Given EnLink Midstream’s stronger consensus rating and higher probable upside, analysts clearly believe EnLink Midstream is more favorable than Transportadora de Gas del Sur.
Valuation and Earnings
This table compares Transportadora de Gas del Sur and EnLink Midstream’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Transportadora de Gas del Sur||$918.84 million||1.62||$405.26 million||$1.95||4.88|
|EnLink Midstream||$7.70 billion||0.48||-$13.20 million||($0.07)||-107.71|
Transportadora de Gas del Sur has higher earnings, but lower revenue than EnLink Midstream. EnLink Midstream is trading at a lower price-to-earnings ratio than Transportadora de Gas del Sur, indicating that it is currently the more affordable of the two stocks.
Transportadora de Gas del Sur pays an annual dividend of $1.54 per share and has a dividend yield of 16.2%. EnLink Midstream pays an annual dividend of $1.13 per share and has a dividend yield of 15.0%. Transportadora de Gas del Sur pays out 79.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. EnLink Midstream pays out -1,614.3% of its earnings in the form of a dividend.
Volatility and Risk
Transportadora de Gas del Sur has a beta of 0.54, indicating that its share price is 46% less volatile than the S&P 500. Comparatively, EnLink Midstream has a beta of 2, indicating that its share price is 100% more volatile than the S&P 500.
This table compares Transportadora de Gas del Sur and EnLink Midstream’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Transportadora de Gas del Sur||33.04%||55.91%||22.56%|
Transportadora de Gas del Sur Company Profile
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.
EnLink Midstream Company Profile
EnLink Midstream, LLC focuses on providing midstream energy services in the United States. It operates through Texas, Oklahoma, Louisiana, and Crude and Condensate segments. The company is involved in gathering, compressing, treating, processing, transporting, storing, and selling natural gas; fractionating, transporting, storing, and selling natural gas liquids; and gathering, transporting, stabilizing, storing, trans-loading, and selling crude oil and condensate, as well as providing brine disposal services. Its midstream energy asset network includes approximately 11,000 miles of pipelines; 20 natural gas processing plants; 7 fractionators; barge and rail terminals; product storage facilities; brine disposal wells; and a crude oil trucking fleet. The company was founded in 2013 and is headquartered in Dallas, Texas.
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