Contrasting Targa Resources (NYSE:TRGP) and Comstock Resources (NYSE:CRK)

Comstock Resources (NYSE:CRK) and Targa Resources (NYSE:TRGP) are both energy companies, but which is the better business? We will compare the two companies based on the strength of their analyst recommendations, institutional ownership, profitability, valuation, risk, dividends and earnings.

Valuation and Earnings

This table compares Comstock Resources and Targa Resources”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Comstock Resources	$1.88 billion	2.15	$395.61 million	$1.46	9.42
Targa Resources	$18.19 billion	3.20	$1.84 billion	$11.30	24.00

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

Analyst Recommendations

This is a breakdown of recent recommendations for Comstock Resources and Targa Resources, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Comstock Resources	5	10	0	0	1.67
Targa Resources	0	0	20	2	3.09

Comstock Resources presently has a consensus target price of $14.92, indicating a potential upside of 8.47%. Targa Resources has a consensus target price of $325.89, indicating a potential upside of 20.18%. Given Targa Resources’ stronger consensus rating and higher probable upside, analysts clearly believe Targa Resources is more favorable than Comstock Resources.

Profitability

This table compares Comstock Resources and Targa Resources’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Comstock Resources	19.83%	3.22%	1.35%
Targa Resources	13.45%	68.83%	8.86%

Risk & Volatility

Comstock Resources has a beta of 0.54, meaning that its share price is 46% less volatile than the S&P 500. Comparatively, Targa Resources has a beta of 0.76, meaning that its share price is 24% less volatile than the S&P 500.

Institutional & Insider Ownership

36.1% of Comstock Resources shares are held by institutional investors. Comparatively, 92.1% of Targa Resources shares are held by institutional investors. 2.3% of Comstock Resources shares are held by insiders. Comparatively, 1.4% of Targa Resources shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Dividends

Comstock Resources pays an annual dividend of $0.50 per share and has a dividend yield of 3.6%. Targa Resources pays an annual dividend of $5.00 per share and has a dividend yield of 1.8%. Comstock Resources pays out 34.2% of its earnings in the form of a dividend. Targa Resources pays out 44.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Targa Resources has increased its dividend for 5 consecutive years. Comstock Resources is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Targa Resources beats Comstock Resources on 14 of the 18 factors compared between the two stocks.

About Comstock Resources

Comstock Resources, Inc., an independent energy company, engages in the acquisition, exploration, development, and production of natural gas and oil properties in the United States. Its assets are located in the Haynesville and Bossier shales located in North Louisiana and East Texas. The company was incorporated in 1919 and is headquartered in Frisco, Texas. Comstock Resources, Inc. is a subsidiary of Arkoma Drilling, L.P.

About Targa Resources

Targa Resources Corp., together with its subsidiary, Targa Resources Partners LP, owns, operates, acquires, and develops a portfolio of complementary domestic midstream infrastructure assets in North America. It operates in two segments, Gathering and Processing, and Logistics and Transportation. The company is involved in gathering, compressing, treating, processing, transporting, and selling natural gas; storing, fractionating, treating, transporting, and selling natural gas liquids (NGL) and NGL products, including services to liquefied petroleum gas exporters; and gathering, storing, terminaling, purchasing, and selling crude oil. It is also involved in the purchase and resale of NGL products; and sale of propane, as well as provision of related logistics services to multi-state retailers, independent retailers, and other end-users. In addition, the company offers NGL balancing services; and transportation services to refineries and petrochemical companies in the Gulf Coast area, as well as purchases, markets, and resells natural gas. As of December 31, 2023, it leased and managed approximately 605 railcars; 137 tractors; and 6 vacuum trucks and 2 pressurized NGL barges. Targa Resources Corp. was incorporated in 2005 and is headquartered in Houston, Texas.