EQT Midstream Partners (EQM) vs. EnLink Midstream Partners (ENLK) Critical Review
EQT Midstream Partners (NYSE: EQM) and EnLink Midstream Partners (NYSE:ENLK) are both mid-cap oils/energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, institutional ownership, dividends, profitability, valuation and analyst recommendations.
This table compares EQT Midstream Partners and EnLink Midstream Partners’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|EQT Midstream Partners||63.33%||25.24%||15.91%|
|EnLink Midstream Partners||2.51%||3.43%||1.47%|
EQT Midstream Partners has a beta of 0.92, indicating that its stock price is 8% less volatile than the S&P 500. Comparatively, EnLink Midstream Partners has a beta of 2.15, indicating that its stock price is 115% more volatile than the S&P 500.
Institutional and Insider Ownership
74.9% of EQT Midstream Partners shares are held by institutional investors. Comparatively, 42.2% of EnLink Midstream Partners shares are held by institutional investors. 0.2% of EnLink Midstream Partners shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Valuation & Earnings
This table compares EQT Midstream Partners and EnLink Midstream Partners’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|EQT Midstream Partners||$834.10 million||6.07||$571.90 million||$5.19||12.11|
|EnLink Midstream Partners||$5.74 billion||0.90||$148.90 million||$0.05||296.06|
EQT Midstream Partners has higher earnings, but lower revenue than EnLink Midstream Partners. EQT Midstream Partners is trading at a lower price-to-earnings ratio than EnLink Midstream Partners, indicating that it is currently the more affordable of the two stocks.
This is a summary of recent recommendations for EQT Midstream Partners and EnLink Midstream Partners, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|EQT Midstream Partners||0||5||7||0||2.58|
|EnLink Midstream Partners||0||9||3||0||2.25|
EQT Midstream Partners presently has a consensus target price of $84.20, suggesting a potential upside of 33.99%. EnLink Midstream Partners has a consensus target price of $17.91, suggesting a potential upside of 21.01%. Given EQT Midstream Partners’ stronger consensus rating and higher probable upside, equities research analysts clearly believe EQT Midstream Partners is more favorable than EnLink Midstream Partners.
EQT Midstream Partners pays an annual dividend of $4.10 per share and has a dividend yield of 6.5%. EnLink Midstream Partners pays an annual dividend of $1.56 per share and has a dividend yield of 10.5%. EQT Midstream Partners pays out 79.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. EnLink Midstream Partners pays out 3,120.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. EnLink Midstream Partners has increased its dividend for 5 consecutive years. EnLink Midstream Partners is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
EQT Midstream Partners beats EnLink Midstream Partners on 11 of the 17 factors compared between the two stocks.
EQT Midstream Partners Company Profile
EQT Midstream Partners, LP (EQM) owns, operates, acquires and develops midstream assets in the Appalachian Basin. The Company’s segments include Gathering and Transmission. The Gathering segment primarily includes high pressure gathering lines and the Federal Energy Regulatory Commission (FERC)-regulated low pressure gathering system. Transmission includes EQM’s FERC-regulated interstate pipeline and storage business. The Company’s operations are primarily focused in southwestern Pennsylvania and northern West Virginia. As of December 31, 2016, the Company provided midstream services to EQT Corporation (EQT) and a range of third parties across 24 counties in Pennsylvania, West Virginia and Ohio through its two assets: the gathering system, which delivered natural gas from wells and other receipt points to transmission pipelines, and the transmission and storage system, which served as a header system transmission pipeline.
EnLink Midstream Partners Company Profile
EnLink Midstream Partners, LP is a midstream company. The Company’s business activities are conducted through its subsidiary, EnLink Midstream Operating, LP (the Operating Partnership) and the subsidiaries of the Operating Partnership. The Company operates through five segments: Texas, Oklahoma, Louisiana, Crude and Condensate, and Corporate. The Company focuses on providing midstream energy services, including gathering, processing, transmission, fractionation, storage, condensate stabilization, brine services and marketing to producers of natural gas, natural gas liquids (NGLs), crude oil and condensate. As of December 31, 2016, its midstream energy asset network included approximately 11,000 miles of pipelines, 20 natural gas processing plants, seven fractionators, barge and rail terminals, product storage facilities, purchasing and marketing capabilities, brine disposal wells, a crude oil trucking fleet, and equity investments in certain private midstream companies.
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