Analyzing Golar LNG (GLNG) & Hess Midstream Partners (HESM)

Golar LNG (NASDAQ: GLNG) and Hess Midstream Partners (NYSE:HESM) are both energy companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, valuation, analyst recommendations, institutional ownership, profitability, risk and earnings.

Dividends

Golar LNG pays an annual dividend of $0.20 per share and has a dividend yield of 0.6%. Hess Midstream Partners pays an annual dividend of $1.24 per share and has a dividend yield of 5.9%. Golar LNG pays out -10.8% of its earnings in the form of a dividend.

Institutional and Insider Ownership

82.8% of Golar LNG shares are held by institutional investors. Comparatively, 57.2% of Hess Midstream Partners shares are held by institutional investors. 0.0% of Golar LNG shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and target prices for Golar LNG and Hess Midstream Partners, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Golar LNG 0 1 7 0 2.88
Hess Midstream Partners 0 0 5 0 3.00

Golar LNG currently has a consensus price target of $35.17, indicating a potential upside of 13.66%. Hess Midstream Partners has a consensus price target of $28.80, indicating a potential upside of 37.40%. Given Hess Midstream Partners’ stronger consensus rating and higher possible upside, analysts plainly believe Hess Midstream Partners is more favorable than Golar LNG.

Earnings and Valuation

This table compares Golar LNG and Hess Midstream Partners’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Golar LNG $80.26 million 38.94 -$186.53 million ($1.86) -16.63
Hess Midstream Partners $509.80 million 1.12 $206.30 million N/A N/A

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

Profitability

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

Net Margins Return on Equity Return on Assets
Golar LNG -180.90% -9.15% -3.78%
Hess Midstream Partners 28.19% 6.64% 6.15%

Summary

Hess Midstream Partners beats Golar LNG on 8 of the 13 factors compared between the two stocks.

About Golar LNG

Golar LNG Limited is a midstream liquefied natural gas (LNG) company engaged primarily in the transportation, regasification, liquefaction and trading of LNG. The Company is engaged in the acquisition, ownership, operation and chartering of LNG carriers and Floating Storage Regasification Unit (FSRUs) through its subsidiaries and affiliates, and the development of LNG projects, such as floating LNGs (FLNGs). The Company’s segments include Vessel operations, LNG trading and FLNG. Under the Vessel operations segment, the Company operates and charters out LNG carriers and FSRUs on fixed terms to customers. Through the LNG trading segment, the Company provides physical and financial risk management in LNG and gas markets for customers around the world. The FLNG segment includes the costs associated with the conversion of its LNG carrier, the Hilli, to a FLNG. The Company, along with its affiliate, Golar LNG Partners LP, has a combined fleet of approximately 30 vessels.

About Hess Midstream Partners

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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