Head to Head Contrast: Energy Transfer Equity LP Unit (ETE) & Transportadora de Gas del Sur SA ADR Class B (TGS)

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Energy Transfer Equity LP Unit (NYSE: TGS) and Transportadora de Gas del Sur SA ADR Class B (NYSE:TGS) are both oils/energy companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, risk, valuation, dividends, institutional ownership, profitability and analyst recommendations.

Earnings and Valuation

This table compares Energy Transfer Equity LP Unit and Transportadora de Gas del Sur SA ADR Class B’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Energy Transfer Equity LP Unit $40.52 billion 0.52 $915.00 million $1.21 15.02
Transportadora de Gas del Sur SA ADR Class B $742.27 million 2.95 $168.71 million $1.07 12.87

Energy Transfer Equity LP Unit 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 Energy Transfer Equity LP Unit, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent ratings and target prices for Energy Transfer Equity LP Unit and Transportadora de Gas del Sur SA ADR Class B, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Energy Transfer Equity LP Unit 0 2 11 0 2.85
Transportadora de Gas del Sur SA ADR Class B 0 1 1 0 2.50

Energy Transfer Equity LP Unit presently has a consensus price target of $20.73, indicating a potential upside of 14.01%. Transportadora de Gas del Sur SA ADR Class B has a consensus price target of $25.00, indicating a potential upside of 81.55%. Given Transportadora de Gas del Sur SA ADR Class B’s higher probable upside, analysts plainly believe Transportadora de Gas del Sur SA ADR Class B is more favorable than Energy Transfer Equity LP Unit.

Institutional and Insider Ownership

47.8% of Energy Transfer Equity LP Unit shares are owned by institutional investors. Comparatively, 8.9% of Transportadora de Gas del Sur SA ADR Class B shares are owned by institutional investors. 3.3% of Energy Transfer Equity LP Unit shares are owned 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.

Profitability

This table compares Energy Transfer Equity LP Unit and Transportadora de Gas del Sur SA ADR Class B’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Energy Transfer Equity LP Unit 2.60% 5.50% 1.85%
Transportadora de Gas del Sur SA ADR Class B 23.70% 70.18% 25.42%

Volatility and Risk

Energy Transfer Equity LP Unit has a beta of 1.9, indicating that its share price is 90% more volatile than the S&P 500. Comparatively, Transportadora de Gas del Sur SA ADR Class B has a beta of 1.35, indicating that its share price is 35% more volatile than the S&P 500.

Dividends

Energy Transfer Equity LP Unit pays an annual dividend of $1.22 per share and has a dividend yield of 6.7%. Transportadora de Gas del Sur SA ADR Class B pays an annual dividend of $0.21 per share and has a dividend yield of 1.5%. Energy Transfer Equity LP Unit pays out 100.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Transportadora de Gas del Sur SA ADR Class B pays out 19.6% of its earnings in the form of a dividend. Energy Transfer Equity LP Unit has increased its dividend for 5 consecutive years. Energy Transfer Equity LP Unit is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Energy Transfer Equity LP Unit beats Transportadora de Gas del Sur SA ADR Class B on 11 of the 17 factors compared between the two stocks.

About Energy Transfer Equity LP Unit

Energy Transfer Equity, L.P. provides diversified energy-related services in the United States. It owns and operates approximately 7,900 miles of natural gas transportation pipelines and three natural gas storage facilities in Texas; and approximately 11,800 miles of interstate natural gas pipelines. The company sells natural gas to electric utilities, independent power plants, local distribution companies, industrial end-users, and other marketing companies. Its midstream operations include ownership and operation of natural gas and natural gas liquid (NGL) gathering pipelines, natural gas processing plants, natural gas treating facilities, and natural gas conditioning facilities in Texas, New Mexico, West Virginia, Pennsylvania, and Louisiana; natural gas gathering, oil pipeline, and oil stabilization facilities in South Texas; a natural gas gathering system in Ohio; and transportation and supply of water to natural gas producers in Pennsylvania. The company's NGL transportation and services operations include ownership of approximately 4,300 miles of NGL pipelines, 5 NGL and propane fractionation facilities, and NGL storage facilities with aggregate working storage capacity of approximately 53 million barrels. It also sells gasoline, middle distillates, and motor fuel at retail, as well as crude oil, NGLs, and refined products; operates convenience stores; and distributes motor fuels and other petroleum products. The company provides natural gas compression services; treating services, such as carbon dioxide and hydrogen sulfide removal, natural gas cooling, dehydration, and British thermal unit management services; and manages coal and natural resources properties, as well as sells standing timber, leases coal-related infrastructure facilities, collects oil and gas royalties, and generates a total of 75 megawatts electrical power. Energy Transfer Equity, L.P. was founded in 2002 and is based in Dallas, Texas.

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.

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