Marathon Petroleum (MPC) & Targa Resources Partners (NGLS) Head-To-Head Review

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

Profitability

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

Net Margins Return on Equity Return on Assets
Marathon Petroleum 2.35% 8.52% 3.71%
Targa Resources Partners 3.27% 0.29% 1.61%

Dividends

Marathon Petroleum pays an annual dividend of $1.60 per share and has a dividend yield of 2.5%. Targa Resources Partners pays an annual dividend of $3.30 per share and has a dividend yield of 31.0%. Marathon Petroleum pays out 49.1% of its earnings in the form of a dividend. 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. Marathon Petroleum has raised its dividend for 6 consecutive years and Targa Resources Partners has raised its dividend for 7 consecutive years. Targa Resources Partners is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares Marathon Petroleum and Targa Resources Partners’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Marathon Petroleum $63.36 billion 0.49 $1.17 billion $3.26 19.42
Targa Resources Partners N/A N/A N/A $0.78 13.65

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

Institutional & Insider Ownership

80.8% of Marathon Petroleum shares are held by institutional investors. 1.1% of Marathon Petroleum shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Marathon Petroleum 0 4 10 0 2.71
Targa Resources Partners 0 0 0 0 N/A

Marathon Petroleum currently has a consensus target price of $65.09, indicating a potential upside of 2.83%. Given Marathon Petroleum’s higher probable upside, analysts plainly believe Marathon Petroleum is more favorable than Targa Resources Partners.

Summary

Marathon Petroleum beats Targa Resources Partners on 9 of the 12 factors compared between the two stocks.

Marathon Petroleum Company Profile

Marathon Petroleum Corporation is engaged in refining, marketing, retail and transportation businesses in the United States and the largest east of the Mississippi. The Company operates through three segments: Refining & Marketing; Speedway; and Midstream. The Refining & Marketing segment refines crude oil and other feedstocks at the Company’s seven refineries in the Gulf Coast and Midwest regions of the United States. Its Speedway segment sells transportation fuels and convenience products in the retail market in the Midwest, East Coast and Southeast regions of the United States. The Company’s Midstream is engaged in the operations of MPLX LP and certain other related operations. It gathers, processes and transports natural gas, natural gas liquids (NGLs), crude oil and refined products. MPLX is a limited partnership which owns, operates, develops and acquires midstream energy infrastructure assets.

Targa Resources Partners Company Profile

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 & Ratings for Marathon Petroleum Corporation Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Marathon Petroleum Corporation and related companies with MarketBeat.com's FREE daily email newsletter.

Leave a Reply