Cone Midstream Partners (NYSE: CNNX) and Energy Transfer Equity, L.P. (NYSE:ETE) are both oils/energy companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, risk, valuation, profitability, dividends and earnings.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Cone Midstream Partners and Energy Transfer Equity, L.P., as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cone Midstream Partners 0 4 4 0 2.50
Energy Transfer Equity, L.P. 0 3 11 0 2.79

Cone Midstream Partners presently has a consensus price target of $23.29, indicating a potential upside of 48.98%. Energy Transfer Equity, L.P. has a consensus price target of $21.18, indicating a potential upside of 25.26%. Given Cone Midstream Partners’ higher possible upside, research analysts clearly believe Cone Midstream Partners is more favorable than Energy Transfer Equity, L.P..

Profitability

This table compares Cone Midstream Partners and Energy Transfer Equity, L.P.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cone Midstream Partners 45.95% 14.15% 11.74%
Energy Transfer Equity, L.P. 2.18% 3.79% 1.14%

Earnings & Valuation

This table compares Cone Midstream Partners and Energy Transfer Equity, L.P.’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Cone Midstream Partners $234.05 million 4.25 $150.90 million $1.67 9.36
Energy Transfer Equity, L.P. $42.15 billion 0.43 $5.53 billion $0.79 21.41

Energy Transfer Equity, L.P. has higher revenue and earnings than Cone Midstream Partners. Cone Midstream Partners is trading at a lower price-to-earnings ratio than Energy Transfer Equity, L.P., indicating that it is currently the more affordable of the two stocks.

Dividends

Cone Midstream Partners pays an annual dividend of $1.17 per share and has a dividend yield of 7.5%. Energy Transfer Equity, L.P. pays an annual dividend of $1.14 per share and has a dividend yield of 6.7%. Cone Midstream Partners pays out 70.1% of its earnings in the form of a dividend. Energy Transfer Equity, L.P. pays out 144.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Energy Transfer Equity, L.P. has increased its dividend for 4 consecutive years. Cone Midstream Partners is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk and Volatility

Cone Midstream Partners has a beta of 1.63, meaning that its share price is 63% more volatile than the S&P 500. Comparatively, Energy Transfer Equity, L.P. has a beta of 1.9, meaning that its share price is 90% more volatile than the S&P 500.

Institutional & Insider Ownership

36.5% of Cone Midstream Partners shares are held by institutional investors. Comparatively, 48.5% of Energy Transfer Equity, L.P. shares are held by institutional investors. 3.3% of Energy Transfer Equity, L.P. shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

Energy Transfer Equity, L.P. beats Cone Midstream Partners on 9 of the 17 factors compared between the two stocks.

About Cone Midstream Partners

CONE Midstream Partners LP is a master limited partnership formed by CONSOL Energy Inc. (CONSOL) and Noble Energy, Inc. (Noble Energy). The Company owns, operates, develops and acquires natural gas gathering and other midstream energy assets to service CONSOL’s and Noble Energy’s production in the Marcellus Shale in Pennsylvania and West Virginia. Its assets include natural gas gathering pipelines and compression and dehydration facilities, as well as condensate gathering, collection, separation and stabilization facilities. It operates through three segments: Anchor Systems, Growth Systems and Additional Systems. Its Anchor Systems include developed midstream systems, including its three midstream systems (the McQuay System, the Majorsville System and the Mamont System) and related assets. Its Growth Systems are located in the dry gas regions of its dedicated acreage. Its Additional Systems include various gathering systems located in the wet gas regions of its dedicated acreage.

About Energy Transfer Equity, L.P.

Energy Transfer Equity, L.P. (ETE) owns equity interests in Energy Transfer Partners, L.P. (ETP) and Sunoco LP, which are engaged in diversified energy-related services. The Company’s segments include Investment in ETP, including the consolidated operations of ETP; Investment in Sunoco LP, including the consolidated operations of Sunoco LP; Investment in Lake Charles LNG, including the operations of Lake Charles LNG, and Corporate and Other. Its Investment in ETP segment includes the ETP’s operations, which include intrastate transportation and storage operations; interstate transportation and storage operations; midstream operations; liquids transportation and services operations; ETP’s Investment in Sunoco Logistics; Retail Marketing operations, and ETP’s other operations and Investments. The Investment in Sunoco LP segment includes wholesale operations and retail operations. Lake Charles LNG owns a LNG import terminal and regasification facility located on Louisiana’s Gulf Coast.

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