Financial Analysis: CNX Midstream Partners (CNXM) and Energy Transfer Equity (ETE)

CNX Midstream Partners (NYSE: CNXM) and Energy Transfer Equity (NYSE:ETE) are both energy companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, valuation, analyst recommendations, earnings, institutional ownership, risk and dividends.

Dividends

CNX Midstream Partners pays an annual dividend of $1.21 per share and has a dividend yield of 6.3%. Energy Transfer Equity pays an annual dividend of $1.18 per share and has a dividend yield of 6.6%. CNX Midstream Partners pays out 71.2% of its earnings in the form of a dividend. Energy Transfer Equity pays out 113.5% 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 has increased its dividend for 5 consecutive years. Energy Transfer Equity is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares CNX Midstream Partners and Energy Transfer Equity’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
CNX Midstream Partners $239.21 million 2.75 $96.48 million $1.70 11.26
Energy Transfer Equity $36.01 billion 0.54 $983.00 million $1.04 17.22

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

Insider and Institutional Ownership

37.2% of CNX Midstream Partners shares are held by institutional investors. Comparatively, 51.2% of Energy Transfer Equity shares are held by institutional investors. 3.3% of Energy Transfer Equity shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and target prices for CNX Midstream Partners and Energy Transfer Equity, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CNX Midstream Partners 0 4 5 0 2.56
Energy Transfer Equity 0 3 11 0 2.79

CNX Midstream Partners currently has a consensus price target of $22.43, indicating a potential upside of 17.18%. Energy Transfer Equity has a consensus price target of $21.70, indicating a potential upside of 21.16%. Given Energy Transfer Equity’s stronger consensus rating and higher probable upside, analysts plainly believe Energy Transfer Equity is more favorable than CNX Midstream Partners.

Volatility and Risk

CNX Midstream Partners has a beta of 1.64, suggesting that its share price is 64% more volatile than the S&P 500. Comparatively, Energy Transfer Equity has a beta of 1.87, suggesting that its share price is 87% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
CNX Midstream Partners 48.40% 15.22% 12.15%
Energy Transfer Equity 2.29% 3.84% 1.16%

Summary

Energy Transfer Equity beats CNX Midstream Partners on 11 of the 17 factors compared between the two stocks.

CNX Midstream Partners Company Profile

CNX Midstream Partners LP, formerly 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.

Energy Transfer Equity Company Profile

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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