QEP Midstream Partners (NYSE: QEPM) and EQT Midstream Partners (NYSE:EQM) are both energy companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, dividends, earnings, risk, valuation, analyst recommendations and institutional ownership.

Profitability

This table compares QEP Midstream Partners and EQT Midstream Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
QEP Midstream Partners 62.86% 23.46% 13.76%
EQT Midstream Partners 65.99% 25.85% 16.59%

Dividends

EQT Midstream Partners pays an annual dividend of $4.10 per share and has a dividend yield of 6.0%. QEP Midstream Partners does not pay a dividend. EQT Midstream Partners pays out 78.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. QEP Midstream Partners has increased its dividend for 5 consecutive years.

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
QEP Midstream Partners N/A N/A N/A $1.11 14.50
EQT Midstream Partners $735.61 million 7.48 $537.95 million $5.23 13.06

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

Analyst Recommendations

This is a summary of current ratings and price targets for QEP Midstream Partners and EQT Midstream Partners, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
QEP Midstream Partners 0 0 0 0 N/A
EQT Midstream Partners 0 3 6 0 2.67

EQT Midstream Partners has a consensus price target of $86.71, indicating a potential upside of 26.92%. Given EQT Midstream Partners’ higher possible upside, analysts clearly believe EQT Midstream Partners is more favorable than QEP Midstream Partners.

Institutional & Insider Ownership

74.5% of EQT Midstream Partners shares are owned by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

EQT Midstream Partners beats QEP Midstream Partners on 9 of the 12 factors compared between the two stocks.

QEP Midstream Partners Company Profile

QEP Midstream Partners, LP (QEP Midstream) is a master limited partnership formed to own, operate, acquire and develop midstream energy assets. The Company’s primary assets consist of ownership interests in four gathering systems and two Federal Energy Regulatory Commission (FERC)-regulated pipelines through which, the Company provides natural gas midstream services, and crude oil gathering and transportation services to producers and users of natural gas and crude oil. The natural gas midstream services include gathering, compression, treating and dehydration, processing, fractionation, natural gas transmission and natural gas liquids (NGL) products transportation. The Company provides crude oil gathering and transportation services in Colorado, North Dakota, Utah and Wyoming.

EQT Midstream Partners Company Profile

EQT Midstream Partners, LP (EQM) owns, operates, acquires and develops midstream assets in the Appalachian Basin. The Company’s segments include Gathering and Transmission. The Gathering segment primarily includes high pressure gathering lines and the Federal Energy Regulatory Commission (FERC)-regulated low pressure gathering system. Transmission includes EQM’s FERC-regulated interstate pipeline and storage business. The Company’s operations are primarily focused in southwestern Pennsylvania and northern West Virginia. As of December 31, 2016, the Company provided midstream services to EQT Corporation (EQT) and a range of third parties across 24 counties in Pennsylvania, West Virginia and Ohio through its two assets: the gathering system, which delivered natural gas from wells and other receipt points to transmission pipelines, and the transmission and storage system, which served as a header system transmission pipeline.

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