Reviewing EQT Midstream Partners, (EQM) & Pembina Pipeline Corp. (PBA)
EQT Midstream Partners, (NYSE: EQM) and Pembina Pipeline Corp. (NYSE:PBA) are both mid-cap oils/energy companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, risk, profitability, valuation and earnings.
Risk & Volatility
EQT Midstream Partners, has a beta of 0.89, suggesting that its share price is 11% less volatile than the S&P 500. Comparatively, Pembina Pipeline Corp. has a beta of 0.71, suggesting that its share price is 29% less volatile than the S&P 500.
Earnings and Valuation
This table compares EQT Midstream Partners, and Pembina Pipeline Corp.’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|EQT Midstream Partners,||$774.18 million||7.62||$623.10 million||$5.17||14.17|
|Pembina Pipeline Corp.||$3.84 billion||3.32||$1.02 billion||$0.97||32.61|
Pembina Pipeline Corp. has higher revenue and earnings than EQT Midstream Partners,. EQT Midstream Partners, is trading at a lower price-to-earnings ratio than Pembina Pipeline Corp., indicating that it is currently the more affordable of the two stocks.
EQT Midstream Partners, pays an annual dividend of $3.74 per share and has a dividend yield of 5.1%. Pembina Pipeline Corp. pays an annual dividend of $1.57 per share and has a dividend yield of 5.0%. EQT Midstream Partners, pays out 72.3% of its earnings in the form of a dividend. Pembina Pipeline Corp. pays out 161.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Pembina Pipeline Corp. has increased its dividend for 4 consecutive years. EQT Midstream Partners, is clearly the better dividend stock, given its higher yield and lower payout ratio.
This table compares EQT Midstream Partners, and Pembina Pipeline Corp.’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|EQT Midstream Partners,||66.99%||25.61%||16.75%|
|Pembina Pipeline Corp.||12.12%||8.60%||3.85%|
Insider & Institutional Ownership
76.5% of EQT Midstream Partners, shares are held by institutional investors. Comparatively, 47.3% of Pembina Pipeline Corp. shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
This is a summary of recent recommendations and price targets for EQT Midstream Partners, and Pembina Pipeline Corp., as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|EQT Midstream Partners,||0||2||4||0||2.67|
|Pembina Pipeline Corp.||0||0||8||0||3.00|
EQT Midstream Partners, presently has a consensus target price of $91.00, suggesting a potential upside of 24.25%. Pembina Pipeline Corp. has a consensus target price of $45.00, suggesting a potential upside of 42.27%. Given Pembina Pipeline Corp.’s stronger consensus rating and higher probable upside, analysts clearly believe Pembina Pipeline Corp. is more favorable than EQT Midstream Partners,.
EQT Midstream Partners, beats Pembina Pipeline Corp. on 9 of the 16 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.
About Pembina Pipeline Corp.
Pembina Pipeline Corporation is an energy transportation and service provider. The Company operates through four segments. The Conventional Pipelines segment consists of the tariff-based operations of pipelines and related facilities to deliver crude oil, condensate and natural gas liquids (NGL) in Alberta, British Columbia, Saskatchewan, and North Dakota, United States. The Oil Sands & Heavy Oil segment consists of the Syncrude, Horizon, Nipisi and Mitsue Pipelines, and the Cheecham Lateral. These pipelines and related facilities deliver synthetic crude oil produced from oil sands under long-term cost-of-service arrangements. The Gas Services segment consists of natural gas gathering and processing facilities. The Midstream segment consists of the Company’s interests in extraction and fractionation facilities, terminalling and storage hub services under a mixture of short, medium and long-term contractual arrangements.
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