TC PipeLines, (TCP) vs. Antero Midstream Partners (AM) Critical Analysis
TC PipeLines, (NYSE: TCP) and Antero Midstream Partners (NYSE:AM) are both mid-cap oils/energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, institutional ownership, valuation, risk and profitability.
Volatility and Risk
TC PipeLines, has a beta of 0.99, suggesting that its stock price is 1% less volatile than the S&P 500. Comparatively, Antero Midstream Partners has a beta of 1.96, suggesting that its stock price is 96% more volatile than the S&P 500.
This is a summary of recent recommendations and price targets for TC PipeLines, and Antero Midstream Partners, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Antero Midstream Partners||0||0||13||0||3.00|
TC PipeLines, currently has a consensus price target of $62.75, indicating a potential upside of 21.70%. Antero Midstream Partners has a consensus price target of $38.82, indicating a potential upside of 22.61%. Given Antero Midstream Partners’ stronger consensus rating and higher probable upside, analysts clearly believe Antero Midstream Partners is more favorable than TC PipeLines,.
Insider & Institutional Ownership
60.6% of TC PipeLines, shares are held by institutional investors. Comparatively, 43.3% of Antero Midstream Partners shares are held by institutional investors. 0.1% of TC PipeLines, shares are held by insiders. Comparatively, 7.9% of Antero Midstream Partners shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
TC PipeLines, pays an annual dividend of $4.00 per share and has a dividend yield of 7.8%. Antero Midstream Partners pays an annual dividend of $1.28 per share and has a dividend yield of 4.0%. TC PipeLines, pays out 127.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Antero Midstream Partners pays out 86.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. TC PipeLines, has increased its dividend for 7 consecutive years. TC PipeLines, is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares TC PipeLines, and Antero Midstream Partners’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Antero Midstream Partners||44.99%||19.46%||13.11%|
Earnings & Valuation
This table compares TC PipeLines, and Antero Midstream Partners’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|TC PipeLines,||$481.00 million||7.44||$399.00 million||$3.13||16.47|
|Antero Midstream Partners||$682.01 million||8.66||$455.28 million||$1.48||21.39|
Antero Midstream Partners has higher revenue and earnings than TC PipeLines,. TC PipeLines, is trading at a lower price-to-earnings ratio than Antero Midstream Partners, indicating that it is currently the more affordable of the two stocks.
Antero Midstream Partners beats TC PipeLines, on 11 of the 17 factors compared between the two stocks.
About TC PipeLines,
TC PipeLines, LP is a master limited partnership. The Company acquires, owns and participates in the management of energy infrastructure businesses in North America. The Company’s pipeline systems transport natural gas in the United States. As of December 31, 2016, the Company had four pipelines and equity ownership interests in three natural gas interstate pipeline systems that are collectively designed to transport approximately 9.1 billion cubic feet per day of natural gas from producing regions and import facilities to market hubs and consuming markets primarily in the Western, Midwestern and Eastern United States. The Company’s pipeline systems include Gas Transmission Northwest LLC (GTN), Bison Pipeline LLC (Bison), North Baja Pipeline, LLC (North Baja), Tuscarora Gas Transmission Company (Tuscarora), Northern Border Pipeline Company (Northern Border), Portland Natural Gas Transmission System (PNGTS), and Great Lakes Gas Transmission Limited Partnership (Great Lakes).
About Antero Midstream Partners
Antero Midstream Partners LP is a limited partnership formed by Antero Resources Corporation (Antero Resources) to own, operate and develop midstream energy assets to service Antero Resources’ production. The Company’s segments include gathering and compression, and water handling and treatment. The gathering and compression segment includes a network of gathering pipelines, compressor stations, and processing and fractionation plants that collect and process natural gas, natural gas liquids (NGLs) and oil from Antero Resources’ wells in West Virginia and Ohio. Its water handling and treatment segment includes two independent fresh water distribution systems from sources including the Ohio River, local reservoirs, as well as several regional waterways. The water handling and treatment segment also includes other fluid handling services which includes, high rate transfer, wastewater transportation, disposal and treatment.
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