Analyzing EQT Midstream Partners, (EQM) & Frontline (FRO)
EQT Midstream Partners, (NYSE: EQM) and Frontline (NYSE:FRO) are both oils/energy companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, earnings, profitabiliy, analyst recommendations, risk, institutional ownership and dividends.
Institutional and Insider Ownership
74.6% of EQT Midstream Partners, shares are held by institutional investors. Comparatively, 11.1% of Frontline shares are held by institutional investors. 48.1% of Frontline shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
EQT Midstream Partners, pays an annual dividend of $3.56 per share and has a dividend yield of 4.7%. Frontline pays an annual dividend of $0.60 per share and has a dividend yield of 10.1%. EQT Midstream Partners, pays out 68.9% of its earnings in the form of a dividend. Frontline pays out 150.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Frontline has raised its dividend for 4 consecutive years. Frontline is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares EQT Midstream Partners, and Frontline’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|EQT Midstream Partners,||67.48%||25.49%||16.96%|
Volatility and Risk
EQT Midstream Partners, has a beta of 0.89, meaning that its share price is 11% less volatile than the S&P 500. Comparatively, Frontline has a beta of 1.97, meaning that its share price is 97% more volatile than the S&P 500.
Earnings & Valuation
This table compares EQT Midstream Partners, and Frontline’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|EQT Midstream Partners,||$753.25 million||8.14||$604.17 million||$5.17||14.71|
|Frontline||$702.25 million||1.44||$313.91 million||$0.40||14.93|
EQT Midstream Partners, has higher revenue and earnings than Frontline. EQT Midstream Partners, is trading at a lower price-to-earnings ratio than Frontline, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of recent ratings and price targets for EQT Midstream Partners, and Frontline, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|EQT Midstream Partners,||0||3||4||0||2.57|
EQT Midstream Partners, currently has a consensus price target of $92.00, suggesting a potential upside of 20.96%. Frontline has a consensus price target of $7.00, suggesting a potential upside of 17.25%. Given EQT Midstream Partners,’s stronger consensus rating and higher probable upside, equities analysts plainly believe EQT Midstream Partners, is more favorable than Frontline.
EQT Midstream Partners, beats Frontline on 12 of the 17 factors compared between the two stocks.
About EQT Midstream Partners,
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.
Frontline Ltd. is a shipping company. The Company is engaged in the seaborne transportation of crude oil and oil products. Its tankers segment includes crude oil tankers and product tankers. As of December 31, 2016, the Company’s fleet consisted of 28 vessels owned by the Company (seven very large crude carriers (VLCCs), 10 Suezmax tankers and 11 Aframax/LR2 tankers); 13 vessels that are under capital leases (11 VLCCs and two Suezmax tankers); one VLCC that is recorded as an investment in finance lease; four vessels chartered-in for periods of 12 months, including extension options (two VLCCs and two Suezmax tankers); two VLCCs where cost/revenue is split equally with a third party (of which one is chartered-in by it and one by a third party); three medium range product tankers that are chartered-in on short term time charters with a remaining duration of less than two months, and five vessels that are under commercial management (two Suezmax tankers and three Aframax oil tankers).
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