Financial Analysis: Golar LNG Partners (NASDAQ:GMLP) versus Hess Midstream Partners (HESM)

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

Dividends

Golar LNG Partners pays an annual dividend of $2.31 per share and has a dividend yield of 11.4%. Hess Midstream Partners does not pay a dividend. Golar LNG Partners pays out 82.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Recommendations

This is a summary of recent recommendations for Golar LNG Partners and Hess Midstream Partners, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Golar LNG Partners 0 3 1 0 2.25
Hess Midstream Partners 0 1 4 0 2.80

Golar LNG Partners presently has a consensus target price of $23.25, indicating a potential upside of 14.93%. Hess Midstream Partners has a consensus target price of $28.80, indicating a potential upside of 49.92%. Given Hess Midstream Partners’ stronger consensus rating and higher possible upside, analysts clearly believe Hess Midstream Partners is more favorable than Golar LNG Partners.

Insider & Institutional Ownership

77.5% of Golar LNG Partners shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Golar LNG Partners 40.50% 28.97% 7.83%
Hess Midstream Partners 49.24% N/A N/A

Earnings & Valuation

This table compares Golar LNG Partners and Hess Midstream Partners’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Golar LNG Partners $441.92 million 3.23 $366.28 million $2.81 7.20
Hess Midstream Partners $540.50 million 1.94 $357.80 million N/A N/A

Golar LNG Partners has higher revenue, but lower earnings than Hess Midstream Partners.

Summary

Hess Midstream Partners beats Golar LNG Partners on 7 of the 13 factors compared between the two stocks.

About Golar LNG Partners

Golar LNG Partners LP owns and operates floating storage regasification units (FSRUs) and liquefied natural gas (LNG) carriers under long-term time charters. The Company operates through the LNG market segment. The Company’s fleet consists of approximately six FSRUs and over four LNG carriers. The Company’s FSRU vessels include Golar Spirit, Golar Winter, Golar Freeze, NR Satu, Golar Igloo and Golar Eskimo. Its FSRU vessels have a total capacity of approximately 846,000 cubic meters. The Company’s LNG carriers include Golar Mazo, Methane Princess, Golar Grand and Golar Maria. Its LNG carriers have a total capacity of over 564,400 cubic meters.

About Hess Midstream Partners

Hess Midstream Partners LP is a fee-based, traditional master limited partnership formed to own, operate, develop and acquire a set of midstream assets to provide services to Hess and third-party crude oil and natural gas producers. The Company’s assets are primarily located in the Bakken and Three Forks shale plays in the Williston Basin area of North Dakota (collectively referred as the Bakken). It operates its business through three segments: gathering; processing and storage; and terminaling and export. The Company’s gathering business consisted of its 20% controlling economic interest in Gathering Opco, which owns North Dakota natural gas, natural gas liquids and crude oil gathering systems. The Company’s processing and storage business consisted of its 20% controlling economic interest in the Tioga Gas Plant and its 100% interest in the Mentor Storage Terminal. The Company’s terminaling and export business consisted of its 20% controlling economic interest in Logistics Opco.

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