Critical Review: Tc Pipelines (NYSE:TRP) and USA Compression Partners (USAC)

Tc Pipelines (NYSE:TRP) and USA Compression Partners (NYSE:USAC) are both oils/energy companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, institutional ownership, risk, valuation, dividends, earnings and analyst recommendations.

Analyst Recommendations

This is a summary of current recommendations and price targets for Tc Pipelines and USA Compression Partners, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Tc Pipelines 2 4 4 0 2.20
USA Compression Partners 0 2 4 0 2.67

Tc Pipelines presently has a consensus price target of $50.20, indicating a potential upside of 5.02%. USA Compression Partners has a consensus price target of $20.20, indicating a potential upside of 17.44%. Given USA Compression Partners’ stronger consensus rating and higher probable upside, analysts clearly believe USA Compression Partners is more favorable than Tc Pipelines.

Profitability

This table compares Tc Pipelines and USA Compression Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Tc Pipelines 26.72% 13.85% 3.79%
USA Compression Partners -0.44% 1.57% 0.56%

Institutional & Insider Ownership

63.2% of Tc Pipelines shares are owned by institutional investors. Comparatively, 34.7% of USA Compression Partners shares are owned by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

Tc Pipelines pays an annual dividend of $2.24 per share and has a dividend yield of 4.7%. USA Compression Partners pays an annual dividend of $2.10 per share and has a dividend yield of 12.2%. Tc Pipelines pays out 75.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. USA Compression Partners pays out -488.4% of its earnings in the form of a dividend. Tc Pipelines has increased its dividend for 3 consecutive years. USA Compression Partners is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings and Valuation

This table compares Tc Pipelines and USA Compression Partners’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Tc Pipelines $10.55 billion 4.18 $2.86 billion $2.98 16.04
USA Compression Partners $584.35 million 2.65 -$10.55 million ($0.43) -40.00

Tc Pipelines has higher revenue and earnings than USA Compression Partners. USA Compression Partners is trading at a lower price-to-earnings ratio than Tc Pipelines, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Tc Pipelines has a beta of 0.88, indicating that its share price is 12% less volatile than the S&P 500. Comparatively, USA Compression Partners has a beta of 1.37, indicating that its share price is 37% more volatile than the S&P 500.

Summary

Tc Pipelines beats USA Compression Partners on 10 of the 15 factors compared between the two stocks.

About Tc Pipelines

TransCanada Corporation operates as an energy infrastructure company in North America. It operates through Canadian Natural Gas Pipelines, U.S. Natural Gas Pipelines, Mexico Natural Gas Pipelines, Liquids Pipelines, and Energy segments. The company transports natural gas to local distribution companies, power generation plants, industrial facilities, interconnecting pipelines, and other businesses. It owns and operates wholly-owned natural gas pipelines of 81,500 kilometers and partially-owned natural gas pipelines of 11,100 kilometers; and regulated natural gas storage facilities with a total working gas capacity of 535 billion cubic feet. The company also owns and manages midstream assets that provide natural gas producer services, including gathering, treatment, conditioning, processing, and liquids handling with a focus on the Appalachian Basin. In addition, it owns and operates liquids pipelines infrastructure for the transportation of Alberta crude oil supplies to the refining markets in Illinois, Oklahoma, and the U.S. Gulf Coast, as well as U.S. crude oil supplies from the market hub at Cushing, Oklahoma to the U.S. Gulf Coast. Further, the company operates 10 power generation facilities with a power generation capacity of 6,615 megawatt powered by natural gas and nuclear fuel sources located in Alberta, Ontario, Québec, New Brunswick, and Arizona; and owns and operates approximately 118 billion cubic feet of unregulated natural gas storage capacity in Alberta. TransCanada Corporation was founded in 1951 and is headquartered in Calgary, Canada.

About USA Compression Partners

USA Compression Partners, LP provides compression services under term contracts with customers in the natural gas and crude oil industries in the United States. The company engineers, designs, operates, services, and repairs its compression units; and maintains related support inventory and equipment. It also provides compression services in various shale plays, including the Utica, Marcellus, Permian Basin, Delaware Basin, Eagle Ford, Mississippi Lime, Granite Wash, Woodford, Barnett, Haynesville, Niobrara, and Fayetteville shales. As of December 31, 2017, the company had approximately 1,799,781 horsepower in its fleet. It serves oil companies; and independent producers, processors, gatherers, and transporters of natural gas and crude oil. USA Compression GP, LLC operates as the general partner of USA Compression Partners, LP. The company was formerly known as Compression Holdings, LP, and changed its name to USA Compression Partners, LP in June 2011. USA Compression Partners, LP was founded in 1998 and is headquartered in Austin, Texas.

Receive News & Ratings for Tc Pipelines Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Tc Pipelines and related companies with MarketBeat.com's FREE daily email newsletter.