Critical Analysis: Birchcliff Energy (OTCMKTS:BIREF) and Transportadora De Gas Sa Ord B (NYSE:TGS)

Transportadora De Gas Sa Ord B (NYSE:TGS) and Birchcliff Energy (OTCMKTS:BIREF) are both energy companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, analyst recommendations, risk, valuation, institutional ownership, earnings and profitability.

Valuation and Earnings

This table compares Transportadora De Gas Sa Ord B and Birchcliff Energy”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Transportadora De Gas Sa Ord B	$1.41 billion	2.79	$336.69 million	$2.61	10.00
Birchcliff Energy	$508.03 million	2.49	$46.43 million	$0.25	18.44

Transportadora De Gas Sa Ord B has higher revenue and earnings than Birchcliff Energy. Transportadora De Gas Sa Ord B is trading at a lower price-to-earnings ratio than Birchcliff Energy, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Transportadora De Gas Sa Ord B and Birchcliff Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Transportadora De Gas Sa Ord B	27.38%	16.29%	10.07%
Birchcliff Energy	12.93%	4.23%	2.77%

Analyst Recommendations

This is a breakdown of recent ratings for Transportadora De Gas Sa Ord B and Birchcliff Energy, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Transportadora De Gas Sa Ord B	0	2	1	0	2.33
Birchcliff Energy	0	4	0	0	2.00

Transportadora De Gas Sa Ord B currently has a consensus price target of $39.00, suggesting a potential upside of 49.45%. Given Transportadora De Gas Sa Ord B’s stronger consensus rating and higher probable upside, research analysts plainly believe Transportadora De Gas Sa Ord B is more favorable than Birchcliff Energy.

Insider & Institutional Ownership

3.3% of Transportadora De Gas Sa Ord B shares are held by institutional investors. Comparatively, 0.8% of Birchcliff Energy shares are held by institutional investors. 1.5% of Birchcliff Energy shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Risk and Volatility

Transportadora De Gas Sa Ord B has a beta of 0.57, meaning that its stock price is 43% less volatile than the S&P 500. Comparatively, Birchcliff Energy has a beta of 0.31, meaning that its stock price is 69% less volatile than the S&P 500.

Summary

Transportadora De Gas Sa Ord B beats Birchcliff Energy on 12 of the 14 factors compared between the two stocks.

About Transportadora De Gas Sa Ord B

Transportadora de Gas del Sur S.A. engages in transportation of natural gas, and production and commercialization of natural gas liquids in Argentina and internationally. The company operates through four segments: Natural Gas Transportation Services; Liquids Production and Commercialization; Midstream; and Telecommunications. The Natural Gas Transportation segment transports natural gas through pipeline system to distribution companies, power plants, and industrial customers. It provides operation and maintenance services for the natural gas transportation facilities. The Liquids Production and Commercialization segment produces and commercializes natural gas liquids, such as ethane, liquid petroleum gas, natural gasoline, propane, and butane. This segment offers certain related services comprising reception, storage, and dispatch of the liquids. The Midstream segment provides natural gas conditioning services; treatment, removal of impurities and natural gas compression, including the collection and transport of natural gas; and inspection and maintenance of pipelines and compressor plants services. In addition, this segment offers steam generation for electricity production and management services for expansion works and steam generation for the production of electricity. The Telecommunications segment offers data transmission services through a network of digital terrestrial radio relay. It serves residential, commercial, industrial, and electric power generation end users. The company was incorporated in 1992 and is headquartered in Buenos Aires, Argentina. Transportadora de Gas del Sur S.A. is a subsidiary of Compañía de Inversiones de Energía S.A.

About Birchcliff Energy

Birchcliff Energy Ltd., an intermediate oil and natural gas company, explores for, develops, and produces natural gas, light oil, condensate, and other natural gas liquids in Western Canada. The company holds interests in the areas of Montney/Doig Resource Play, including the Pouce Coupe and Gordondale properties in Alberta. Birchcliff Energy Ltd. was founded in 2004 and is headquartered in Calgary, Canada.