Head to Head Contrast: EQT Midstream Partners (EQM) versus Tesoro Logistics (ANDX)

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

Dividends

EQT Midstream Partners pays an annual dividend of $3.92 per share and has a dividend yield of 5.7%. Tesoro Logistics pays an annual dividend of $3.94 per share and has a dividend yield of 8.7%. 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 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 has increased its dividend for 4 consecutive years.

Earnings & Valuation

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
EQT Midstream Partners $735.61 million 7.52 $537.95 million $5.22 13.16
Tesoro Logistics $1.22 billion 8.03 $315.00 million $2.35 19.28

EQT Midstream Partners has higher earnings, but lower revenue 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.

Risk and Volatility

EQT Midstream Partners has a beta of 0.89, meaning that its stock price is 11% less volatile than the S&P 500. Comparatively, Tesoro Logistics has a beta of 1.12, meaning that its stock price is 12% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations and price targets for EQT Midstream Partners and Tesoro Logistics, as provided by MarketBeat.

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

EQT Midstream Partners currently has a consensus target price of $90.83, suggesting a potential upside of 32.24%. Tesoro Logistics has a consensus target price of $55.38, suggesting a potential upside of 22.21%. Given EQT Midstream Partners’ stronger consensus rating and higher probable upside, equities analysts clearly believe EQT Midstream Partners is more favorable than Tesoro Logistics.

Profitability

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

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

Insider & Institutional Ownership

73.7% of EQT Midstream Partners shares are owned by institutional investors. Comparatively, 34.9% of Tesoro Logistics shares are owned by institutional investors. 0.2% of Tesoro Logistics shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

EQT Midstream Partners beats Tesoro Logistics on 10 of the 16 factors compared between the two stocks.

About EQT Midstream Partners

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.

About Tesoro Logistics

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.

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