Gevo (NASDAQ:GEVO – Get Free Report) and Targa Resources (NYSE:TRGP – Get Free Report) are both energy companies, but which is the superior investment? We will contrast the two companies based on the strength of their analyst recommendations, dividends, earnings, profitability, valuation, institutional ownership and risk.
Profitability
This table compares Gevo and Targa Resources’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Gevo | -119.93% | -6.50% | -4.22% |
| Targa Resources | 13.55% | 69.26% | 8.64% |
Insider & Institutional Ownership
35.2% of Gevo shares are owned by institutional investors. Comparatively, 92.1% of Targa Resources shares are owned by institutional investors. 7.1% of Gevo shares are owned by insiders. Comparatively, 1.4% of Targa Resources shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Risk and Volatility
Earnings and Valuation
This table compares Gevo and Targa Resources”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Gevo | $160.58 million | 2.42 | -$33.84 million | ($0.89) | -1.76 |
| Targa Resources | $17.03 billion | 3.67 | $1.84 billion | $10.46 | 27.86 |
Targa Resources has higher revenue and earnings than Gevo. Gevo 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 summary of current ratings for Gevo and Targa Resources, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Gevo | 1 | 3 | 2 | 0 | 2.17 |
| Targa Resources | 0 | 1 | 17 | 1 | 3.00 |
Gevo presently has a consensus target price of $2.55, suggesting a potential upside of 62.42%. Targa Resources has a consensus target price of $301.18, suggesting a potential upside of 3.34%. Given Gevo’s higher possible upside, equities analysts plainly believe Gevo is more favorable than Targa Resources.
Summary
Targa Resources beats Gevo on 12 of the 15 factors compared between the two stocks.
About Gevo
Gevo, Inc. operates as a carbon abatement company. It operates through three segments: Gevo, Agri-Energy, and Renewable Natural Gas. The company focuses on transforming renewable energy into energy-dense liquid hydrocarbons that can be used as renewable fuels. It offers renewable gasoline and diesel, isobutanol, sustainable aviation fuel, renewable natural gas, isobutylene, ethanol, and animal feed and protein. The company was formerly known as Methanotech, Inc. and changed its name to Gevo, Inc. in March 2006. Gevo, Inc. was incorporated in 2005 and is headquartered in Englewood, Colorado.
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.
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