Why Targa Resources Is Poised to Outperform

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, midstream natural gas services provider Targa Resources Partners (NYSE: NGLS  ) has earned a coveted five-star ranking.

With that in mind, let's take a closer look at Targa and see what CAPS investors are saying about the stock right now.

Targa facts

Headquarters (founded)	Houston, Texas (2006)
Market Cap	$3.7 billion
Industry	Oil and gas storage and transportation
Trailing-12-Month Revenue	$5.9 billion
Management	CEO Joe Perkins (since 2012) COO Michael Heim (since 2005)
Return on Equity (average, past 3 years)	16.5%
Cash/Debt	$88.9 million / $1.7 billion
Dividend Yield	6.6%
Competitors	BP Enterprise Products Partners ONEOK Partners

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 95% of the 276 members who have rated Targa believe the stock will outperform the S&P 500 going forward.

Just last week, one of those bulls, All-Star TMFDeej, tapped Targa as a particularly special opportunity:

What I like about this company again is there is a story as to why its shares should rise in the future. The story with Targa is that it is reshaping its business model toward one that is less exposed to commodity prices. Today around half of the Company's business is exposed to commodity pricing. It has a slew [of] new projects that are scheduled to come online by 2014, which will reduce its exposure to commodity prices to around 35%. Once the market recognizes this shift in mix to more [stable] business the company will likely be awarded with a higher multiple, causing its shares to rise.

If you want market-thumping returns, you need to put together the best portfolio you can. Of course, despite a strong four-star rating, Targa may not be your top choice.

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Want to see how well (or not so well) the stocks in this series are performing? Follow the TrackPoisedTo CAPS account.