Analyzing Western Midstream Partners (NYSE:WES) and Hafnia (NYSE:HAFN)

Western Midstream Partners (NYSE:WES) and Hafnia (NYSE:HAFN) are both energy companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, profitability, risk, dividends, earnings and valuation.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Western Midstream Partners	29.44%	33.13%	8.74%
Hafnia	56.72%	26.74%	17.14%

Analyst Recommendations

This is a summary of recent ratings and target prices for Western Midstream Partners and Hafnia, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Western Midstream Partners	0	6	3	2	2.64
Hafnia	0	1	3	1	3.00

Western Midstream Partners presently has a consensus target price of $49.89, suggesting a potential upside of 7.45%. Hafnia has a consensus target price of $12.00, suggesting a potential upside of 10.19%. Given Hafnia’s stronger consensus rating and higher probable upside, analysts plainly believe Hafnia is more favorable than Western Midstream Partners.

Earnings & Valuation

This table compares Western Midstream Partners and Hafnia”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Western Midstream Partners	$3.84 billion	4.99	$1.18 billion	$3.18	14.60
Hafnia	$955.87 million	5.84	$339.68 million	$1.32	8.25

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

Dividends

Western Midstream Partners pays an annual dividend of $3.72 per share and has a dividend yield of 8.0%. Hafnia pays an annual dividend of $2.00 per share and has a dividend yield of 18.4%. Western Midstream Partners pays out 117.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Hafnia pays out 151.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Western Midstream Partners has increased its dividend for 5 consecutive years.

Volatility & Risk

Western Midstream Partners has a beta of 0.74, indicating that its share price is 26% less volatile than the S&P 500. Comparatively, Hafnia has a beta of 0.52, indicating that its share price is 48% less volatile than the S&P 500.

Institutional & Insider Ownership

84.8% of Western Midstream Partners shares are held by institutional investors. 0.0% of Western Midstream Partners shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

Western Midstream Partners beats Hafnia on 11 of the 17 factors compared between the two stocks.

About Western Midstream Partners

Western Midstream Partners, LP, together with its subsidiaries, operates as a midstream energy company primarily in the United States. It is involved in gathering, compressing, treating, processing, and transporting natural gas; gathering, stabilizing, and transporting condensate, natural gas liquids (NGLs), and crude oil; and gathering and disposing produced water. The company also buys and sells natural gas, NGLs, and condensate. It operates assets located in Texas, New Mexico, the Rocky Mountains, and North-central Pennsylvania. Western Midstream Holdings, LLC operates as the general partner of the company. The company was formerly known as Western Gas Equity Partners, LP and changed its name to Western Midstream Partners, LP in February 2019. Western Midstream Partners, LP was incorporated in 2007 and is based in The Woodlands, Texas.

About Hafnia

Hafnia Limited owns and operates oil product tankers in Bermuda. It operates through Long Range II, Long Range I, Medium Range (MR), Handy size, and Specialized segments. The company transports clean and dirty, refined oil products, vegetable oil, and easy chemicals to national and international oil companies, and chemical companies, as well as trading and utility companies; and owns and operates 200 vessels. It provides ship owning, ship-management, investment, management, corporate support, and agency office services. In addition, the company provides integrated shipping platform, including technical management, commercial and chartering services, pool management, and large-scale bunker desk services. Hafnia Limited is based in Hamilton, Bermuda.