Boardwalk Pipeline Partners (BWP) versus Tallgrass Energy GP (TEGP) Head to Head Comparison

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

Valuation and Earnings

This table compares Boardwalk Pipeline Partners and Tallgrass Energy GP’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Boardwalk Pipeline Partners $1.32 billion 2.28 $297.00 million $1.35 8.93
Tallgrass Energy GP $655.90 million 6.24 -$128.72 million $0.76 29.16

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

Risk & Volatility

Boardwalk Pipeline Partners has a beta of 0.63, suggesting that its share price is 37% less volatile than the S&P 500. Comparatively, Tallgrass Energy GP has a beta of 1.88, suggesting that its share price is 88% more volatile than the S&P 500.

Dividends

Boardwalk Pipeline Partners pays an annual dividend of $0.40 per share and has a dividend yield of 3.3%. Tallgrass Energy GP pays an annual dividend of $1.95 per share and has a dividend yield of 8.8%. Boardwalk Pipeline Partners pays out 29.6% of its earnings in the form of a dividend. Tallgrass Energy GP pays out 256.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Tallgrass Energy GP has raised its dividend for 2 consecutive years. Tallgrass Energy GP is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a summary of current ratings and target prices for Boardwalk Pipeline Partners and Tallgrass Energy GP, as reported by MarketBeat.

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

Boardwalk Pipeline Partners presently has a consensus target price of $15.56, suggesting a potential upside of 29.15%. Tallgrass Energy GP has a consensus target price of $23.17, suggesting a potential upside of 4.54%. Given Boardwalk Pipeline Partners’ higher probable upside, equities research analysts plainly believe Boardwalk Pipeline Partners is more favorable than Tallgrass Energy GP.

Insider & Institutional Ownership

92.6% of Boardwalk Pipeline Partners shares are held by institutional investors. Comparatively, 31.8% of Tallgrass Energy GP shares are held by institutional investors. 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 Boardwalk Pipeline Partners and Tallgrass Energy GP’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Boardwalk Pipeline Partners 21.29% 6.85% 3.65%
Tallgrass Energy GP -17.96% 2.54% 1.09%

Summary

Boardwalk Pipeline Partners beats Tallgrass Energy GP on 9 of the 15 factors compared between the two stocks.

Boardwalk Pipeline Partners Company Profile

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.

Tallgrass Energy GP Company Profile

Tallgrass Energy GP, 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. Tallgrass Energy GP, LP was founded in 2013 and is based in Leawood, Kansas.

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