Head-To-Head Survey: Hess Midstream Partners (HESM) vs. Teekay LNG Partners (TGP)

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

Dividends

Hess Midstream Partners pays an annual dividend of $1.24 per share and has a dividend yield of 5.9%. Teekay LNG Partners pays an annual dividend of $0.56 per share and has a dividend yield of 2.8%. Teekay LNG Partners pays out 68.3% of its earnings in the form of a dividend.

Institutional & Insider Ownership

57.2% of Hess Midstream Partners shares are owned by institutional investors. Comparatively, 36.0% of Teekay LNG Partners shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Hess Midstream Partners 28.19% 6.64% 6.15%
Teekay LNG Partners 20.99% 5.39% 1.97%

Analyst Recommendations

This is a summary of current ratings and recommmendations for Hess Midstream Partners and Teekay LNG Partners, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hess Midstream Partners 0 0 5 0 3.00
Teekay LNG Partners 0 3 0 0 2.00

Hess Midstream Partners presently has a consensus price target of $28.80, indicating a potential upside of 37.14%. Teekay LNG Partners has a consensus price target of $16.00, indicating a potential downside of 20.60%. Given Hess Midstream Partners’ stronger consensus rating and higher probable upside, research analysts plainly believe Hess Midstream Partners is more favorable than Teekay LNG Partners.

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hess Midstream Partners $509.80 million 1.12 $206.30 million N/A N/A
Teekay LNG Partners $396.44 million 4.05 $140.45 million $0.82 24.57

Hess Midstream Partners has higher revenue and earnings than Teekay LNG Partners.

Summary

Hess Midstream Partners beats Teekay LNG Partners on 11 of the 12 factors compared between the two stocks.

Hess Midstream Partners Company Profile

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.

Teekay LNG Partners Company Profile

Teekay LNG Partners L.P. is an international provider of marine transportation services for liquefied natural gas (LNG), liquefied petroleum gas (LPG) and crude oil. The Company’s fleet, excluding newbuildings, consists of approximately 30 LNG carriers (including the six MALT LNG Carriers, four RasGas 3 LNG Carriers, four Angola LNG Carriers and two Exmar LNG Carriers), over 20 LPG carriers (including 20 Exmar LPG Carriers), approximately seven Suezmax-class crude oil tankers and a Handymax product tanker, all of which are double-hulled. Its segments include liquefied gas segment and conventional tanker segment. The liquefied gas segment consists of LNG carriers, LPG carriers and multigas carriers, which can carry both LNG and LPG. The conventional tanker segment consists of approximately seven Suezmax-class crude oil tankers and a Handymax product tanker. Its vessels primarily operate under long-term, fixed-rate charters with energy and utility companies, and Teekay Corporation.

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