Hess Midstream Partners (NASDAQ: HESM) and Golar LNG Partners (NASDAQ:GMLP) are both small-cap energy companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, profitabiliy, dividends, valuation, institutional ownership and earnings.
Valuation & Earnings
This table compares Hess Midstream Partners and Golar LNG Partners’ revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| Hess Midstream Partners | $521.20 million | 2.30 | $326.30 million | N/A | N/A |
| Golar LNG Partners | $441.92 million | 3.57 | $366.28 million | $2.81 | 7.94 |
Golar LNG Partners has higher revenue, but lower earnings than Hess Midstream Partners.
Profitability
This table compares Hess Midstream Partners and Golar LNG Partners’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Hess Midstream Partners | 48.43% | N/A | N/A |
| Golar LNG Partners | 40.50% | 28.97% | 7.83% |
Dividends
Golar LNG Partners pays an annual dividend of $2.31 per share and has a dividend yield of 10.4%. 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.
Insider and Institutional Ownership
77.3% of Golar LNG Partners shares are held by institutional investors. 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 Recommendations
This is a summary of recent recommendations and price targets for Hess Midstream Partners and Golar LNG Partners, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Hess Midstream Partners | 0 | 2 | 3 | 0 | 2.60 |
| Golar LNG Partners | 0 | 3 | 1 | 0 | 2.25 |
Hess Midstream Partners presently has a consensus target price of $29.40, indicating a potential upside of 34.00%. Golar LNG Partners has a consensus target price of $23.25, indicating a potential upside of 4.26%. Given Hess Midstream Partners’ stronger consensus rating and higher probable upside, analysts clearly believe Hess Midstream Partners is more favorable than Golar LNG Partners.
Summary
Golar LNG Partners beats Hess Midstream Partners on 7 of the 13 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.
Golar LNG Partners Company Profile
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.
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