Tesoro Logistics (NYSE: ANDX) and EQT Midstream Partners (NYSE:EQM) are both mid-cap oils/energy companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, analyst recommendations, profitability, risk, earnings, dividends and institutional ownership.

Dividends

Tesoro Logistics pays an annual dividend of $3.94 per share and has a dividend yield of 9.2%. EQT Midstream Partners pays an annual dividend of $3.92 per share and has a dividend yield of 5.9%. Tesoro Logistics pays out 167.7% 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 75.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Tesoro Logistics has increased its dividend for 4 consecutive years. Tesoro Logistics is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of current recommendations for Tesoro Logistics and EQT Midstream Partners, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Tesoro Logistics 0 3 6 0 2.67
EQT Midstream Partners 0 2 6 0 2.75

Tesoro Logistics presently has a consensus price target of $55.38, indicating a potential upside of 28.87%. EQT Midstream Partners has a consensus price target of $90.83, indicating a potential upside of 37.19%. Given EQT Midstream Partners’ stronger consensus rating and higher probable upside, analysts clearly believe EQT Midstream Partners is more favorable than Tesoro Logistics.

Risk and Volatility

Tesoro Logistics has a beta of 1.12, suggesting that its share price is 12% more volatile than the S&P 500. Comparatively, EQT Midstream Partners has a beta of 0.93, suggesting that its share price is 7% less volatile than the S&P 500.

Profitability

This table compares Tesoro Logistics and EQT Midstream Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Tesoro Logistics 23.50% 22.48% 6.61%
EQT Midstream Partners 65.99% 25.85% 16.59%

Insider and Institutional Ownership

34.9% of Tesoro Logistics shares are held by institutional investors. Comparatively, 73.7% of EQT Midstream Partners shares are held by institutional investors. 0.2% of Tesoro Logistics shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Tesoro Logistics and EQT Midstream Partners’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Tesoro Logistics $1.22 billion 7.61 $315.00 million $2.35 18.29
EQT Midstream Partners $735.61 million 7.25 $537.95 million $5.22 12.68

EQT Midstream Partners has lower revenue, but higher earnings than Tesoro Logistics. EQT Midstream Partners is trading at a lower price-to-earnings ratio than Tesoro Logistics, indicating that it is currently the more affordable of the two stocks.

Summary

EQT Midstream Partners beats Tesoro Logistics on 9 of the 16 factors compared between the two stocks.

Tesoro Logistics Company Profile

Andeavor Logistics LP, formerly Tesoro Logistics LP, is a full-service logistics company operating in the western and mid-continent regions of the United States. The Company operates through three segments. Its Gathering segment consists of crude oil, natural gas and produced water gathering systems in the Bakken Region and Rockies Region. Its Processing segment consists of the Vermillion processing complex, the Uinta Basin processing complex, the Blacks Fork processing complex and the Emigrant Trail processing complex. Its Terminalling and Transportation segment consists of the Northwest Products Pipeline, which includes a regulated common carrier products, a regulated common carrier refined products pipeline system connecting Tesoro Corporation’s Kenai refinery to Anchorage, Alaska, and crude oil and refined products terminals and storage facilities in the western and midwestern United States; marine terminals in California; a petroleum coke handling and storage facility.

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.

Receive News & Ratings for Tesoro Logistics LP Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Tesoro Logistics LP and related companies with MarketBeat.com's FREE daily email newsletter.