Financial Review: Targa Resources Partners (NGLS) vs. China Petroleum & Chemical (SNP)

Targa Resources Partners (NYSE: NGLS) and China Petroleum & Chemical (NYSE:SNP) are both mid-cap oil & gas refining and marketing – nec companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, risk, analyst recommendations, earnings, institutional ownership, valuation and dividends.

Institutional and Insider Ownership

0.9% of China Petroleum & Chemical shares are owned by institutional investors. 92.2% of China Petroleum & Chemical shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Dividends

Targa Resources Partners pays an annual dividend of $3.30 per share and has a dividend yield of 31.0%. China Petroleum & Chemical pays an annual dividend of $3.55 per share and has a dividend yield of 5.0%. Targa Resources Partners pays out 423.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. China Petroleum & Chemical pays out 53.1% of its earnings in the form of a dividend. China Petroleum & Chemical has increased its dividend for 7 consecutive years.

Analyst Recommendations

This is a summary of current ratings and price targets for Targa Resources Partners and China Petroleum & Chemical, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Targa Resources Partners 0 0 0 0 N/A
China Petroleum & Chemical 0 1 3 0 2.75

Profitability

This table compares Targa Resources Partners and China Petroleum & Chemical’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%
China Petroleum & Chemical N/A 4.48% 2.54%

Earnings and Valuation

This table compares Targa Resources Partners and China Petroleum & Chemical’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Targa Resources Partners N/A N/A N/A $0.78 13.65
China Petroleum & Chemical $290.79 billion 0.30 $7.02 billion $6.69 10.66

China Petroleum & Chemical has higher revenue and earnings than Targa Resources Partners. China Petroleum & Chemical is trading at a lower price-to-earnings ratio than Targa Resources Partners, indicating that it is currently the more affordable of the two stocks.

Summary

China Petroleum & Chemical beats Targa Resources Partners on 9 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 China Petroleum & Chemical

China Petroleum & Chemical Corporation is a China-based energy and chemical company. The Company’s segments include Exploration and Development segment, Refining segment, Marketing and Distribution segment, Chemicals segment, and Corporate and Others segment. Exploration and Development segment explores and develops oil fields, as well as produces crude oil and natural gas. Refining segment processes and purifies crude oil, which is sourced from Exploration and Development segment and external suppliers. Marketing and Distribution segment owns and operates oil depots and service stations in China. Chemical segment manufactures and sells petrochemical products, derivative petrochemical products and other chemical products to external customers.

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