Comparing Transportadora de Gas del Sur SA ADR Class B (TGS) & Enterprise Products Partners (EPD)

Transportadora de Gas del Sur SA ADR Class B (NYSE:TGS) and Enterprise Products Partners (NYSE:EPD) are both oils/energy companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, earnings, analyst recommendations, dividends, profitability, institutional ownership and valuation.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Transportadora de Gas del Sur SA ADR Class B and Enterprise Products Partners, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Transportadora de Gas del Sur SA ADR Class B 0 1 1 0 2.50
Enterprise Products Partners 0 1 18 1 3.00

Transportadora de Gas del Sur SA ADR Class B currently has a consensus target price of $25.00, indicating a potential upside of 81.69%. Enterprise Products Partners has a consensus target price of $32.44, indicating a potential upside of 13.84%. Given Transportadora de Gas del Sur SA ADR Class B’s higher possible upside, equities analysts plainly believe Transportadora de Gas del Sur SA ADR Class B is more favorable than Enterprise Products Partners.

Risk & Volatility

Transportadora de Gas del Sur SA ADR Class B has a beta of 1.22, meaning that its share price is 22% more volatile than the S&P 500. Comparatively, Enterprise Products Partners has a beta of 0.91, meaning that its share price is 9% less volatile than the S&P 500.

Dividends

Transportadora de Gas del Sur SA ADR Class B pays an annual dividend of $0.72 per share and has a dividend yield of 5.2%. Enterprise Products Partners pays an annual dividend of $1.72 per share and has a dividend yield of 6.0%. Transportadora de Gas del Sur SA ADR Class B pays out 67.3% of its earnings in the form of a dividend. Enterprise Products Partners pays out 130.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Enterprise Products Partners has raised its dividend for 19 consecutive years. Enterprise Products Partners is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Transportadora de Gas del Sur SA ADR Class B and Enterprise Products Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Transportadora de Gas del Sur SA ADR Class B 23.69% 70.24% 25.44%
Enterprise Products Partners 8.95% 14.42% 6.00%

Institutional and Insider Ownership

9.4% of Transportadora de Gas del Sur SA ADR Class B shares are held by institutional investors. Comparatively, 36.4% of Enterprise Products Partners shares are held by institutional investors. 37.5% of Enterprise Products Partners shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Transportadora de Gas del Sur SA ADR Class B and Enterprise Products Partners’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Transportadora de Gas del Sur SA ADR Class B $742.27 million 2.95 $168.71 million $1.07 12.86
Enterprise Products Partners $29.24 billion 2.11 $2.80 billion $1.32 21.59

Enterprise Products Partners has higher revenue and earnings than Transportadora de Gas del Sur SA ADR Class B. Transportadora de Gas del Sur SA ADR Class B is trading at a lower price-to-earnings ratio than Enterprise Products Partners, indicating that it is currently the more affordable of the two stocks.

Summary

Enterprise Products Partners beats Transportadora de Gas del Sur SA ADR Class B on 11 of the 18 factors compared between the two stocks.

About Transportadora de Gas del Sur SA ADR Class B

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.

About Enterprise Products Partners

Enterprise Products Partners L.P. provides midstream energy services to producers and consumers of natural gas, natural gas liquids (NGLs), crude oil, petrochemicals, and refined products. The company operates through four segments: NGL Pipelines & Services, Crude Oil Pipelines & Services, Natural Gas Pipelines & Services, and Petrochemical & Refined Products Services. The NGL Pipelines & Services segment offers natural gas processing and related NGL marketing services, as well as NGL export docks and related services. It operates approximately 19,600 miles of NGL pipelines; NGL and related product storage facilities; 14 NGL fractionators; and a liquefied petroleum gas and ethane export terminals, and related operations. The Crude Oil Pipelines & Services segment operates approximately 5,800 miles of crude oil pipelines; and crude oil storage and marine terminals located in Oklahoma and Texas, as well as a fleet of 495 tractor-trailer tank trucks used to transport crude oil. It also engages in crude oil marketing activities. The Natural Gas Pipelines & Services segment operates approximately 19,700 miles of natural gas pipeline systems to gather and transport natural gas in Colorado, Louisiana, New Mexico, Texas, and Wyoming. It leases underground salt dome natural gas storage facilities in Texas and Louisiana; owns an underground salt dome storage cavern in Texas; and markets natural gas. The Petrochemical & Refined Products Services segment operates propylene fractionation and related activities, including 800 miles of pipelines; butane isomerization complex, associated deisobutanizer units, and related pipeline assets; and octane enhancement and high purity isobutylene production facilities. It also operates approximately 4,100 miles of refined products pipelines; and terminals, as well as provides refined products marketing and marine transportation services. The company was founded in 1968 and is headquartered in Houston, Texas.

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