PBF Energy (NYSE: PBF) and Targa Resources Partners (NYSE:NGLS) 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 dividends, earnings, valuation, institutional ownership, risk, profitability and analyst recommendations.

Dividends

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PBF Energy pays an annual dividend of $1.20 per share and has a dividend yield of 3.7%. Targa Resources Partners pays an annual dividend of $3.30 per share and has a dividend yield of 31.0%. PBF Energy pays out 57.4% of its earnings in the form of a dividend. Targa Resources Partners pays out 423.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Targa Resources Partners has increased its dividend for 8 consecutive years. Targa Resources Partners is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares PBF Energy and Targa Resources Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
PBF Energy 1.14% 2.35% 0.78%
Targa Resources Partners 3.27% 0.29% 1.61%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for PBF Energy and Targa Resources Partners, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
PBF Energy 4 5 5 0 2.07
Targa Resources Partners 0 0 0 0 N/A

PBF Energy presently has a consensus price target of $31.56, suggesting a potential downside of 2.61%. Given PBF Energy’s higher possible upside, equities research analysts clearly believe PBF Energy is more favorable than Targa Resources Partners.

Earnings & Valuation

This table compares PBF Energy and Targa Resources Partners’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
PBF Energy $15.92 billion 0.22 $170.81 million $2.09 15.50
Targa Resources Partners N/A N/A N/A $0.78 13.65

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

Summary

PBF Energy beats Targa Resources Partners on 7 of the 11 factors compared between the two stocks.

About PBF Energy

PBF Energy Inc. (PBF Energy) is a holding company. The Company is an independent petroleum refiner and supplier of unbranded transportation fuels, heating oil, petrochemical feedstocks, lubricants and other petroleum products in the United States. The Company operates through two segments: Refining and Logistics. It sells its products throughout the Northeast, Midwest, Gulf Coast and West Coast of the United States, as well as in other regions of the United States and Canada, and ships products to other international destinations. As of December 31, 2016, it owned and operated five domestic oil refineries and related assets. As of December 31, 2016, its refineries had a combined processing capacity, known as throughput, of approximately 900,000 barrels per day (bpd) and a weighted-average Nelson Complexity Index of approximately 12.2. As of December 31, 2016, the Company owned and operated five refineries providing geographic and market diversity.

About Targa Resources Partners

Targa Resources Partners LP is a provider of midstream natural gas and natural gas liquid (NGL) services in the United States with a presence in crude oil gathering and petroleum terminaling. The Company is engaged in the business of gathering, compressing, treating, processing and selling natural gas; storing, fractionating, treating, transporting and selling NGLs and NGL products, including services to liquefied petroleum gas (LPG) exporters; gathering, storing and terminaling crude oil, and storing, terminaling and selling refined petroleum products. The Company operates in two divisions: Gathering and Processing, and Logistics and Marketing. The Gathering and Processing division consists of two segments: Field Gathering and Processing, and Coastal Gathering and Processing. The Logistics and Marketing division consists of two segments: Logistics Assets and Marketing and Distribution.

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