Western Gas Partners (NYSE: WES) and EQT Midstream Partners (NYSE:EQM) are both mid-cap oils/energy companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, profitability, valuation, earnings, dividends and risk.

Institutional and Insider Ownership

59.7% of Western Gas Partners shares are owned by institutional investors. Comparatively, 69.1% of EQT Midstream Partners shares are owned by institutional investors. 0.0% of Western Gas Partners shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Risk and Volatility

Western Gas Partners has a beta of 1.21, suggesting that its share price is 21% more volatile than the S&P 500. Comparatively, EQT Midstream Partners has a beta of 0.92, suggesting that its share price is 8% less volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Western Gas Partners 28.35% 15.44% 7.57%
EQT Midstream Partners 65.11% 26.35% 16.29%

Analyst Ratings

This is a summary of current ratings and target prices for Western Gas Partners and EQT Midstream Partners, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Western Gas Partners 0 6 6 0 2.50
EQT Midstream Partners 0 4 8 0 2.67

Western Gas Partners currently has a consensus price target of $53.67, indicating a potential upside of 7.74%. EQT Midstream Partners has a consensus price target of $72.90, indicating a potential upside of 33.15%. Given EQT Midstream Partners’ stronger consensus rating and higher possible upside, analysts plainly believe EQT Midstream Partners is more favorable than Western Gas Partners.

Dividends

Western Gas Partners pays an annual dividend of $3.74 per share and has a dividend yield of 7.5%. EQT Midstream Partners pays an annual dividend of $4.26 per share and has a dividend yield of 7.8%. Western Gas Partners pays out 287.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. EQT Midstream Partners pays out 82.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Western Gas Partners has raised its dividend for 10 consecutive years and EQT Midstream Partners has raised its dividend for 5 consecutive years. EQT Midstream Partners is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation & Earnings

This table compares Western Gas 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
Western Gas Partners $2.25 billion 3.38 $567.48 million $1.30 38.32
EQT Midstream Partners $834.10 million 5.29 $571.90 million $5.19 10.55

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

Summary

EQT Midstream Partners beats Western Gas Partners on 12 of the 17 factors compared between the two stocks.

Western Gas Partners Company Profile

Western Gas Partners LP engages in the owning, operating, acquiring, and developing of midstream energy assets. It involves in the gathering, processing, compressing, treating, and transporting natural gas, condensate, natural gas liquids, and crude oil. The company was founded in August 2007 and is headquartered in The Woodlands, TX.

EQT Midstream Partners Company Profile

EQT Midstream Partners, LP provides natural gas gathering, transmission, and storage services in Pennsylvania, West Virginia, and Ohio. The company owns, operates, acquires, and develops midstream assets in the Appalachian Basin. The company also owned approximately 300 miles of high pressure gathering lines and 1,500 miles of federal energy regulatory commission (FERC) regulated low pressure gathering lines; and approximately 950 miles of FERC regulated interstate pipelines. It serves local distribution companies, marketers, producers, and commercial and industrial users. EQT Midstream Services, LLC serves as the general partner of the company. EQT Midstream Partners, LP is headquartered in Pittsburgh, Pennsylvania.

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