Antero Midstream Partners (NYSE: AM) and Cone Midstream Partners (NYSE:CNNX) are both oils/energy companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, profitabiliy, risk, analyst recommendations, valuation, institutional ownership and dividends.

Profitability

This table compares Antero Midstream Partners and Cone Midstream Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Antero Midstream Partners 38.95% 19.78% 10.55%
Cone Midstream Partners 43.13% 12.90% 11.10%

Volatility and Risk

Antero Midstream Partners has a beta of 1.96, meaning that its share price is 96% more volatile than the S&P 500. Comparatively, Cone Midstream Partners has a beta of 1.6, meaning that its share price is 60% more volatile than the S&P 500.

Dividends

Antero Midstream Partners pays an annual dividend of $1.20 per share and has a dividend yield of 3.9%. Cone Midstream Partners pays an annual dividend of $1.13 per share and has a dividend yield of 6.2%. Antero Midstream Partners pays out 88.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Cone Midstream Partners pays out 69.8% of its earnings in the form of a dividend. Cone Midstream Partners is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation & Earnings

This table compares Antero Midstream Partners and Cone Midstream Partners’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Antero Midstream Partners $625.05 million 9.08 $409.52 million $1.36 22.46
Cone Midstream Partners $235.92 million 4.93 $150.52 million $1.62 11.29

Antero Midstream Partners has higher revenue and earnings than Cone Midstream Partners. Cone Midstream Partners is trading at a lower price-to-earnings ratio than Antero Midstream Partners, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

46.6% of Antero Midstream Partners shares are held by institutional investors. Comparatively, 40.7% of Cone Midstream Partners shares are held by institutional investors. 7.9% of Antero Midstream Partners shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings for Antero Midstream Partners and Cone Midstream Partners, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Antero Midstream Partners 0 0 12 0 3.00
Cone Midstream Partners 0 3 5 0 2.63

Antero Midstream Partners presently has a consensus price target of $39.67, indicating a potential upside of 29.84%. Cone Midstream Partners has a consensus price target of $22.50, indicating a potential upside of 23.02%. Given Antero Midstream Partners’ stronger consensus rating and higher possible upside, analysts clearly believe Antero Midstream Partners is more favorable than Cone Midstream Partners.

Summary

Antero Midstream Partners beats Cone Midstream Partners on 11 of the 16 factors compared between the two stocks.

Antero Midstream Partners Company Profile

Antero Midstream Partners LP is a limited partnership formed by Antero Resources Corporation (Antero Resources) to own, operate and develop midstream energy assets to service Antero Resources’ production. The Company’s segments include gathering and compression, and water handling and treatment. The gathering and compression segment includes a network of gathering pipelines, compressor stations, and processing and fractionation plants that collect and process natural gas, natural gas liquids (NGLs) and oil from Antero Resources’ wells in West Virginia and Ohio. Its water handling and treatment segment includes two independent fresh water distribution systems from sources including the Ohio River, local reservoirs, as well as several regional waterways. The water handling and treatment segment also includes other fluid handling services which includes, high rate transfer, wastewater transportation, disposal and treatment.

Cone Midstream Partners Company Profile

CONE Midstream Partners LP is a master limited partnership formed by CONSOL Energy Inc. (CONSOL) and Noble Energy, Inc. (Noble Energy). The Company owns, operates, develops and acquires natural gas gathering and other midstream energy assets to service CONSOL’s and Noble Energy’s production in the Marcellus Shale in Pennsylvania and West Virginia. Its assets include natural gas gathering pipelines and compression and dehydration facilities, as well as condensate gathering, collection, separation and stabilization facilities. It operates through three segments: Anchor Systems, Growth Systems and Additional Systems. Its Anchor Systems include developed midstream systems, including its three midstream systems (the McQuay System, the Majorsville System and the Mamont System) and related assets. Its Growth Systems are located in the dry gas regions of its dedicated acreage. Its Additional Systems include various gathering systems located in the wet gas regions of its dedicated acreage.

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