Navigator (NYSE: NVGS) and Hess Midstream Partners (NYSE:HESM) are both small-cap transportation companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, analyst recommendations, earnings, institutional ownership, dividends, valuation and risk.

Institutional & Insider Ownership

69.0% of Navigator shares are held by institutional investors. Comparatively, 57.2% of Hess Midstream Partners shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

Hess Midstream Partners pays an annual dividend of $1.24 per share and has a dividend yield of 5.8%. Navigator does not pay a dividend.

Profitability

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

Net Margins Return on Equity Return on Assets
Navigator 3.88% 1.49% 0.80%
Hess Midstream Partners 28.19% 6.64% 6.15%

Analyst Ratings

This is a summary of recent ratings and price targets for Navigator and Hess Midstream Partners, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Navigator 1 0 3 0 2.50
Hess Midstream Partners 0 0 6 0 3.00

Navigator presently has a consensus target price of $13.38, suggesting a potential upside of 24.42%. Hess Midstream Partners has a consensus target price of $28.33, suggesting a potential upside of 32.71%. Given Hess Midstream Partners’ stronger consensus rating and higher possible upside, analysts plainly believe Hess Midstream Partners is more favorable than Navigator.

Valuation and Earnings

This table compares Navigator and Hess Midstream Partners’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Navigator $294.11 million 2.03 $44.63 million $0.21 51.19
Hess Midstream Partners $509.80 million 1.14 $206.30 million N/A N/A

Hess Midstream Partners has higher revenue and earnings than Navigator.

Summary

Hess Midstream Partners beats Navigator on 9 of the 11 factors compared between the two stocks.

Navigator Company Profile

Navigator Holdings Ltd. is an owner and operator of a fleet of handysize liquefied gas carriers. The Company provides international and regional seaborne transportation services of liquefied petroleum gas (LPG), petrochemical gases and ammonia. As of December 31, 2016, it had 33 semi- or fully-refrigerated handysize liquefied gas carriers. Its handysize liquefied gas carriers are liquefied gas carriers with capabilities between 15,000 and 24,999 cubic meter (cbm). Its handysize liquefied gas carriers can accommodate medium- and long-haul routes. In addition, it had four midsize 37,300 cbm ethylene-capable semi-refrigerated liquefied gas carriers as of December 31, 2016. Its midsize ethylene-capable semi-refrigerated gas carriers enable long-haul transportation of ethane/ethylene. As of December 31, 2016, it also had one 38,000 cbm fully refrigerated gas carrier. The Company carries LPG for international energy companies, state-owned utilities and commodities traders.

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.

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