Dynagas LNG Partners (NYSE: DLNG) and Hess Midstream Partners (NASDAQ:HESM) are both small-cap transportation companies, but which is the superior stock? We will compare the two businesses based on the strength of their profitabiliy, risk, institutional ownership, valuation, earnings, analyst recommendations and dividends.

Profitability

This table compares Dynagas LNG Partners and Hess Midstream Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Dynagas LNG Partners 37.68% 23.74% 6.28%
Hess Midstream Partners 48.43% N/A N/A

Dividends

Dynagas LNG Partners pays an annual dividend of $1.69 per share and has a dividend yield of 11.4%. Hess Midstream Partners does not pay a dividend. Dynagas LNG Partners pays out 107.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Insider and Institutional Ownership

21.8% of Dynagas LNG Partners shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Dynagas LNG Partners and Hess Midstream Partners’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Dynagas LNG Partners $166.20 million 3.17 $128.29 million $1.58 9.40
Hess Midstream Partners $521.20 million 2.25 $326.30 million N/A N/A

Hess Midstream Partners has higher revenue and earnings than Dynagas LNG Partners.

Analyst Recommendations

This is a summary of recent ratings and price targets for Dynagas LNG Partners and Hess Midstream Partners, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Dynagas LNG Partners 0 3 3 0 2.50
Hess Midstream Partners 0 2 3 0 2.60

Dynagas LNG Partners presently has a consensus price target of $16.25, indicating a potential upside of 9.43%. Hess Midstream Partners has a consensus price target of $29.40, indicating a potential upside of 36.55%. Given Hess Midstream Partners’ stronger consensus rating and higher possible upside, analysts plainly believe Hess Midstream Partners is more favorable than Dynagas LNG Partners.

Dynagas LNG Partners Company Profile

Dynagas LNG Partners LP is a limited partnership, which focuses on owning and operating liquid natural gas (LNG) carriers. The Company’s vessels are employed on multi-year time charters with international energy companies. As of December 31, 2016, the Company owned and operated a fleet of six LNG carriers, consisting of the three LNG carriers in its Initial Fleet, the Clean Energy, the Ob River and the Amur River, and three 2013-built Ice Class LNG carriers that the Company acquired from its Sponsor the Arctic Aurora, the Yenisei River, and the Lena River (collectively referred as its Fleet). The vessels in its Fleet have an average age of 6.6 years and are contracted under multi-year charters with Shell, Gazprom, Statoil and Yamal with an average remaining charter term, as of March 17, 2017, of approximately 10.6 years, including the charter agreements relating to the Yenisei River and the Lena River with Yamal. The Company’s Fleet is managed by its manager, Dynagas Ltd.

Hess Midstream Partners Company Profile

Hess Midstream Partners LP is a fee-based, traditional master limited partnership formed to own, operate, develop and acquire a set of midstream assets to provide services to Hess and third-party crude oil and natural gas producers. The Company’s assets are primarily located in the Bakken and Three Forks shale plays in the Williston Basin area of North Dakota (collectively referred as the Bakken). It operates its business through three segments: gathering; processing and storage; and terminaling and export. The Company’s gathering business consisted of its 20% controlling economic interest in Gathering Opco, which owns North Dakota natural gas, natural gas liquids and crude oil gathering systems. The Company’s processing and storage business consisted of its 20% controlling economic interest in the Tioga Gas Plant and its 100% interest in the Mentor Storage Terminal. The Company’s terminaling and export business consisted of its 20% controlling economic interest in Logistics Opco.

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