Tallgrass Energy (TGE) vs. Its Competitors Critical Comparison

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Tallgrass Energy (NYSE: TGE) is one of 34 publicly-traded companies in the “Natural gas transmission” industry, but how does it weigh in compared to its peers? We will compare Tallgrass Energy to related companies based on the strength of its institutional ownership, valuation, earnings, analyst recommendations, dividends, risk and profitability.

Profitability

This table compares Tallgrass Energy and its peers’ 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%
Tallgrass Energy Competitors 17.35% 14.07% 7.36%

Institutional and Insider Ownership

42.2% of Tallgrass Energy shares are owned by institutional investors. Comparatively, 51.0% of shares of all “Natural gas transmission” companies are owned by institutional investors. 28.6% of Tallgrass Energy shares are owned by company insiders. Comparatively, 8.2% of shares of all “Natural gas transmission” companies are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and recommmendations for Tallgrass Energy and its peers, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Tallgrass Energy 0 3 1 0 2.25
Tallgrass Energy Competitors 420 1660 2186 79 2.44

Tallgrass Energy presently has a consensus price target of $26.00, suggesting a potential upside of 5.43%. As a group, “Natural gas transmission” companies have a potential downside of 61.96%. Given Tallgrass Energy’s higher possible upside, equities research analysts clearly believe Tallgrass Energy is more favorable than its peers.

Dividends

Tallgrass Energy pays an annual dividend of $1.99 per share and has a dividend yield of 8.1%. 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. As a group, “Natural gas transmission” companies pay a dividend yield of 6.8% and pay out 139.3% of their earnings in the form of a dividend.

Valuation and Earnings

This table compares Tallgrass Energy and its peers top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Tallgrass Energy $655.90 million -$128.72 million 32.45
Tallgrass Energy Competitors $5.28 billion $560.94 million 43.64

Tallgrass Energy’s peers have higher revenue and earnings than Tallgrass Energy. Tallgrass Energy is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Volatility & Risk

Tallgrass Energy has a beta of 1.91, indicating that its stock price is 91% more volatile than the S&P 500. Comparatively, Tallgrass Energy’s peers have a beta of 1.59, indicating that their average stock price is 59% more volatile than the S&P 500.

Summary

Tallgrass Energy peers beat Tallgrass Energy on 11 of the 15 factors compared.

Tallgrass Energy Company Profile

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.

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