TransCanada Corporation (NYSE: TRP) and VTTI Energy Partners (NYSE:VTTI) are both oils/energy companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, profitability, valuation, risk, dividends and analyst recommendations.
Institutional and Insider Ownership
56.8% of TransCanada Corporation shares are held by institutional investors. Comparatively, 74.5% of VTTI Energy Partners shares are held by institutional investors. 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.
This table compares TransCanada Corporation and VTTI Energy Partners’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|VTTI Energy Partners||11.04%||14.27%||5.82%|
TransCanada Corporation pays an annual dividend of $1.85 per share and has a dividend yield of 3.6%. VTTI Energy Partners pays an annual dividend of $1.34 per share and has a dividend yield of 6.9%. TransCanada Corporation pays out 215.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. TransCanada Corporation has raised its dividend for 2 consecutive years.
Valuation and Earnings
This table compares TransCanada Corporation and VTTI Energy Partners’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|TransCanada Corporation||$10.93 billion||4.05||$5.16 billion||$0.86||59.07|
|VTTI Energy Partners||$317.00 million||2.86||$205.45 million||N/A||N/A|
TransCanada Corporation has higher revenue and earnings than VTTI Energy Partners.
This is a summary of current recommendations for TransCanada Corporation and VTTI Energy Partners, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|VTTI Energy Partners||0||3||0||0||2.00|
TransCanada Corporation presently has a consensus price target of $65.21, indicating a potential upside of 28.36%. VTTI Energy Partners has a consensus price target of $19.50, indicating a potential upside of 0.52%. Given TransCanada Corporation’s stronger consensus rating and higher probable upside, equities research analysts clearly believe TransCanada Corporation is more favorable than VTTI Energy Partners.
Volatility and Risk
TransCanada Corporation has a beta of 0.66, suggesting that its share price is 34% less volatile than the S&P 500. Comparatively, VTTI Energy Partners has a beta of 1.18, suggesting that its share price is 18% more volatile than the S&P 500.
TransCanada Corporation Company Profile
TransCanada Corporation is an energy infrastructure company. The Company is engaged in the development and operation of North American energy infrastructure, including natural gas and liquids pipelines, power generation and natural gas storage facilities. Its segments include Canadian Natural Gas Pipelines, U.S. Natural Gas Pipelines, Mexico Natural Gas Pipelines, Liquids Pipelines and Energy. The Company operates in three businesses: Natural Gas Pipelines, Liquids Pipelines and Energy. The Natural Gas Pipelines and Liquids Pipelines segments principally consist of its respective natural gas and liquids pipelines in Canada, the United States and Mexico, as well as its regulated natural gas storage operations in the United States. The Energy segment includes its power operations and the non-regulated natural gas storage business in Canada. TransCanada PipeLines Limited (TCPL) is its principal operating subsidiary.
VTTI Energy Partners Company Profile
VTTI Energy Partners LP provides terminaling services for third party companies engaged in the production, processing, distribution and marketing of refined petroleum products and crude oil. The Company operates through the segment of energy storage terminaling business. Its assets consist of approximately 42.6% interest in VTTI MLP B.V., which owns a portfolio of over six terminals with over 400 tanks and approximately 35.7 million barrels of refined petroleum product and crude oil storage capacity located in Europe, the Middle East, Asia and North America. Its terminals are located in international supply and demand centers for refined petroleum products and crude oil and provide midstream infrastructure services to its customers at these international market hubs. It provides storage and terminaling services for energy industry participants, including marketing companies, integrated oil companies, national oil companies, distributors, and chemical and petrochemical companies.
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