Memorial Production Partners (NASDAQ: MEMP) and EQT GP (NYSE:EQGP) are both energy companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, analyst recommendations, dividends, institutional ownership, earnings, valuation and profitability.
Earnings and Valuation
This table compares Memorial Production Partners and EQT GP’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Memorial Production Partners||N/A||N/A||N/A||($6.48)||-0.02|
|EQT GP||$834.10 million||7.55||$261.99 million||$0.98||24.13|
Institutional & Insider Ownership
5.5% of Memorial Production Partners shares are held by institutional investors. Comparatively, 10.1% of EQT GP shares are held by institutional investors. 1.5% of Memorial Production Partners shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
This is a breakdown of current recommendations for Memorial Production Partners and EQT GP, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Memorial Production Partners||0||0||0||0||N/A|
EQT GP has a consensus price target of $31.60, suggesting a potential upside of 33.62%. Given EQT GP’s higher probable upside, analysts plainly believe EQT GP is more favorable than Memorial Production Partners.
Memorial Production Partners pays an annual dividend of $0.06 per share and has a dividend yield of 46.2%. EQT GP pays an annual dividend of $0.98 per share and has a dividend yield of 4.1%. Memorial Production Partners pays out -0.9% of its earnings in the form of a dividend. EQT GP pays out 100.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Memorial Production Partners has increased its dividend for 2 consecutive years. Memorial Production Partners is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares Memorial Production Partners and EQT GP’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Memorial Production Partners||-395.31%||-496.55%||-58.07%|
EQT GP beats Memorial Production Partners on 9 of the 13 factors compared between the two stocks.
About Memorial Production Partners
Memorial Production Partners LP (the Partnership) owns, acquires and exploits oil and natural gas properties in North America. The Partnership is owned by its limited partners and general partner. Its general partner is responsible for managing all of the Partnership’s operations and activities. The Partnership operates in the acquisition, exploitation, development and production of oil and natural gas properties segment. Its business activities are conducted through Memorial Production Operating LLC (OLLC) and its wholly owned subsidiaries. Its assets consist primarily of producing oil and natural gas properties, and are located in East Texas/Louisiana, Rockies, Offshore Southern California, Permian Basin and South Texas. Most of its oil and natural gas properties are located in oil and natural gas reservoirs with geologic characteristics and production profiles and capital requirements.
About EQT GP
EQT GP Holdings, LP (EQGP) is a limited partnership company and subsidiary of EQT Gathering Holdings, LLC (EQT Gathering Holdings). The Company was formed to own EQT Corporation’s (EQT’s) partnership interests in EQT Midstream Partners, LP (EQM), a limited partnership formed by EQT to own, operate, acquire and develop midstream assets in the Appalachian Basin. Its 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. The Transmission segment includes EQM’s FERC-regulated interstate pipeline and storage business. EQGP has no independent operations. It has partnership interests in EQM. As of December 31, 2016, EQM provided midstream services to EQT and various third parties across 24 counties in Pennsylvania, West Virginia and Ohio through its two primary assets: the gathering system, and the transmission and storage system.
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