Sanchez Energy (NYSE:SN) and Hess Midstream Partners (NYSE:HESM) are both small-cap oils/energy companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, valuation, earnings, dividends, institutional ownership, risk and profitability.

Analyst Recommendations

This is a breakdown of recent ratings for Sanchez Energy and Hess Midstream Partners, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sanchez Energy 2 10 0 0 1.83
Hess Midstream Partners 0 0 3 0 3.00

Sanchez Energy presently has a consensus target price of $3.94, indicating a potential upside of 59.41%. Hess Midstream Partners has a consensus target price of $27.33, indicating a potential upside of 20.84%. Given Sanchez Energy’s higher possible upside, research analysts clearly believe Sanchez Energy is more favorable than Hess Midstream Partners.

Risk and Volatility

Sanchez Energy has a beta of 1.71, suggesting that its stock price is 71% more volatile than the S&P 500. Comparatively, Hess Midstream Partners has a beta of 1.99, suggesting that its stock price is 99% more volatile than the S&P 500.

Institutional & Insider Ownership

48.0% of Sanchez Energy shares are owned by institutional investors. Comparatively, 51.3% of Hess Midstream Partners shares are owned by institutional investors. 11.1% of Sanchez Energy shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Dividends

Hess Midstream Partners pays an annual dividend of $1.38 per share and has a dividend yield of 6.1%. Sanchez Energy does not pay a dividend.

Profitability

This table compares Sanchez Energy and Hess Midstream Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sanchez Energy -15.50% -8.74% 1.63%
Hess Midstream Partners 10.34% 2.48% 2.40%

Valuation & Earnings

This table compares Sanchez Energy and Hess Midstream Partners’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sanchez Energy $740.33 million 0.29 $43.19 million ($0.32) -7.72
Hess Midstream Partners $565.80 million 1.09 $284.80 million N/A N/A

Hess Midstream Partners has lower revenue, but higher earnings than Sanchez Energy.

Summary

Hess Midstream Partners beats Sanchez Energy on 11 of the 14 factors compared between the two stocks.

Sanchez Energy Company Profile

Sanchez Energy Corporation, an independent exploration and production company, focuses on the acquisition and development of U.S. onshore unconventional oil and natural gas resources. It engages in the horizontal development of resources from the Eagle Ford Shale in South Texas. It also holds an undeveloped acreage position in the Tuscaloosa Marine Shale (TMS) in Mississippi and Louisiana. As of December 31, 2017, the company had assembled approximately 285,000 net acres in the Eagle Ford Shale; and owned approximately 37,000 net acres in the TMS. Sanchez Energy Corporation was founded in 2011 and is headquartered in Houston, Texas.

Hess Midstream Partners Company Profile

Hess Midstream Partners LP owns, operates, develops, and acquires midstream assets to provide services to Hess and third-party customers in the United States. It operates through three segments: Gathering, Processing and Storage, and Terminaling and Export. The gathering segment include natural gas and crude oil gathering and compression systems located primarily in McKenzie, Williams and Mountrail Counties, and North Dakota. Its gathering systems consists of approximately 1,200 miles of high and low pressure natural gas and NGL gathering pipelines with capacity of up to 345 MMcf/d, including an aggregate compression capacity of 174 MMcf/d; and crude oil gathering system comprises approximately 400 miles of crude oil gathering pipelines with capacity of up to 161 MBbl/d. The Processing and Storage segment consists of Tioga Gas Plant, a natural gas processing and fractionation plant located in Tioga, North Dakota; and Mentor storage terminal a propane storage cavern and rail, and truck loading and unloading facility located in Mentor, Minnesota. The Terminaling and Export segment owns Ramberg terminal facility; Tioga rail terminal; and crude oil rail cars, as well as Johnson's Corner Header System. The company was founded in 2014 and is based in Houston, Texas.

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