Tallgrass Energy (TGE) versus Boardwalk Pipeline Partners (BWP) Critical Contrast

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Tallgrass Energy (NYSE: BWP) and Boardwalk Pipeline Partners (NYSE:BWP) are both mid-cap oils/energy companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, risk, earnings, dividends, valuation and profitability.

Earnings & Valuation

This table compares Tallgrass Energy and Boardwalk Pipeline Partners’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Tallgrass Energy $655.90 million 6.20 -$128.72 million $0.76 34.53
Boardwalk Pipeline Partners $1.32 billion 2.28 $297.00 million $1.35 8.93

Boardwalk Pipeline Partners has higher revenue and earnings than Tallgrass Energy. Boardwalk Pipeline Partners is trading at a lower price-to-earnings ratio than Tallgrass Energy, indicating that it is currently the more affordable of the two stocks.

Dividends

Tallgrass Energy pays an annual dividend of $1.99 per share and has a dividend yield of 7.6%. Boardwalk Pipeline Partners pays an annual dividend of $0.40 per share and has a dividend yield of 3.3%. Tallgrass Energy pays out 261.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Boardwalk Pipeline Partners pays out 29.6% of its earnings in the form of a dividend.

Profitability

This table compares Tallgrass Energy and Boardwalk Pipeline Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Tallgrass Energy -18.21% 2.03% 0.87%
Boardwalk Pipeline Partners 21.29% 6.85% 3.65%

Volatility and Risk

Tallgrass Energy has a beta of 1.9, suggesting that its stock price is 90% more volatile than the S&P 500. Comparatively, Boardwalk Pipeline Partners has a beta of 0.63, suggesting that its stock price is 37% less volatile than the S&P 500.

Institutional and Insider Ownership

39.4% of Tallgrass Energy shares are owned by institutional investors. Comparatively, 92.6% of Boardwalk Pipeline Partners shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings for Tallgrass Energy and Boardwalk Pipeline Partners, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Tallgrass Energy 0 2 1 0 2.33
Boardwalk Pipeline Partners 1 6 3 0 2.20

Tallgrass Energy presently has a consensus target price of $26.00, suggesting a potential downside of 0.91%. Boardwalk Pipeline Partners has a consensus target price of $15.56, suggesting a potential upside of 29.15%. Given Boardwalk Pipeline Partners’ higher probable upside, analysts clearly believe Boardwalk Pipeline Partners is more favorable than Tallgrass Energy.

Summary

Boardwalk Pipeline Partners beats Tallgrass Energy on 10 of the 15 factors compared between the two stocks.

About Tallgrass Energy

Tallgrass Energy, LP, through its interests in Tallgrass Equity, LLC, provides crude oil transportation services to customers in Wyoming, Colorado, and the surrounding regions of the United States. The company operates through three segments: Natural Gas Transportation; Crude Oil Transportation; and Gathering, Processing & Terminalling. It also provides natural gas transportation and storage services for customers in the Rocky Mountain, Midwest, and Appalachian regions; natural gas and crude oil gathering and processing services for customers in Wyoming; and natural gas liquids (NGLs) transportation services in Northeast Colorado and Wyoming. In addition, the company offers water business services, including freshwater transportation, and produced water gathering and disposal in Colorado, Texas, and Wyoming; crude oil storage and terminalling services in Colorado; and marketing services for NGLs and crude oil. The company was formerly known as Tallgrass Energy GP, LP and changed its name to Tallgrass Energy, LP in June 2018. Tallgrass Energy, LP was founded in 2013 and is based in Leawood, Kansas.

About Boardwalk Pipeline Partners

Boardwalk Pipeline Partners, LP, through its subsidiaries, owns and operates integrated natural gas and natural gas liquids and other hydrocarbons (NGLs) pipeline and storage systems in the United States. It operates interstate natural gas and NGLs pipeline systems, and integrated storage facilities, which are located in the Gulf Coast region, Oklahoma, Arkansas and the Midwestern states of Tennessee, Kentucky, Illinois, Indiana and Ohio. The company's pipeline systems contain approximately 13,880 miles of interconnected natural gas pipelines, directly serving customers in 13 states and indirectly serving customers throughout the northeastern and southeastern United States through various interconnections with unaffiliated pipelines. It also owns and operates approximately 455 miles of NGLs pipelines serving customers in Louisiana and Texas. In addition, the company has underground storage caverns having aggregate capacity of approximately 205.0 billion cubic feet of working natural gas and 24.5 million barrels of NGLs. It serves producers of natural gas, local distribution companies, marketers, electric power generators, industrial users, and interstate and intrastate pipelines. The company was founded in 2005 and is headquartered in Houston, Texas. Boardwalk Pipeline Partners, LP is a subsidiary of Boardwalk Pipelines Holding Corp.

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