EQT Midstream Partners, (EQM) and Enterprise Products Partners L.P. (EPD) Critical Analysis
Enterprise Products Partners L.P. (NYSE: EPD) 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, profitability, earnings, risk, dividends, valuation and analyst recommendations.
Risk and Volatility
Enterprise Products Partners L.P. has a beta of 0.9, indicating that its stock price is 10% less volatile than the S&P 500. Comparatively, EQT Midstream Partners, has a beta of 0.89, indicating that its stock price is 11% less volatile than the S&P 500.
Insider and Institutional Ownership
37.9% of Enterprise Products Partners L.P. shares are owned by institutional investors. Comparatively, 73.5% of EQT Midstream Partners, shares are owned by institutional investors. 37.5% of Enterprise Products Partners L.P. shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Valuation & Earnings
This table compares Enterprise Products Partners L.P. and EQT Midstream Partners,’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Enterprise Products Partners L.P.||$26.33 billion||2.13||$5.06 billion||$1.27||20.56|
|EQT Midstream Partners,||$774.18 million||7.80||$623.10 million||$5.17||14.50|
Enterprise Products Partners L.P. has higher revenue and earnings than EQT Midstream Partners,. EQT Midstream Partners, is trading at a lower price-to-earnings ratio than Enterprise Products Partners L.P., indicating that it is currently the more affordable of the two stocks.
This is a breakdown of current recommendations and price targets for Enterprise Products Partners L.P. and EQT Midstream Partners,, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Enterprise Products Partners L.P.||0||0||14||0||3.00|
|EQT Midstream Partners,||0||2||4||0||2.67|
Enterprise Products Partners L.P. currently has a consensus price target of $31.50, indicating a potential upside of 20.64%. EQT Midstream Partners, has a consensus price target of $91.00, indicating a potential upside of 21.40%. Given EQT Midstream Partners,’s higher possible upside, analysts clearly believe EQT Midstream Partners, is more favorable than Enterprise Products Partners L.P..
This table compares Enterprise Products Partners L.P. and EQT Midstream Partners,’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Enterprise Products Partners L.P.||10.28%||12.04%||5.25%|
|EQT Midstream Partners,||66.99%||25.61%||16.75%|
Enterprise Products Partners L.P. pays an annual dividend of $1.68 per share and has a dividend yield of 6.4%. EQT Midstream Partners, pays an annual dividend of $3.74 per share and has a dividend yield of 5.0%. Enterprise Products Partners L.P. pays out 132.3% 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 72.3% of its earnings in the form of a dividend. Enterprise Products Partners L.P. has increased its dividend for 18 consecutive years and EQT Midstream Partners, has increased its dividend for 4 consecutive years. Enterprise Products Partners L.P. is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Enterprise Products Partners L.P. beats EQT Midstream Partners, on 9 of the 17 factors compared between the two stocks.
Enterprise Products Partners L.P. Company Profile
Enterprise Products Partners L.P. (Enterprise) is a provider of midstream energy services to producers and consumers of natural gas, natural gas liquids (NGLs), crude oil, petrochemicals and refined products in North America. The Company’s segments include NGL Pipelines & Services; Crude Oil Pipelines & Services; Natural Gas Pipelines & Services, and Petrochemical & Refined Products Services. The Company’s midstream energy operations include natural gas gathering, treating, processing, transportation and storage; NGL transportation, fractionation, storage, and import and export terminals, including liquefied petroleum gas (LPG); crude oil gathering, transportation, storage and terminals; petrochemical and refined products transportation, storage, export and import terminals, and related services, and a marine transportation business that operates primarily on the United States inland and Intracoastal Waterway systems.
EQT Midstream Partners, Company Profile
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.
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