Head-To-Head Review: Kinder Morgan (KMI) and Antero Midstream GP (AMGP)

Kinder Morgan (NYSE: KMI) and Antero Midstream GP (NYSE:AMGP) are both oils/energy companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, valuation, institutional ownership, risk, profitability, analyst recommendations and dividends.

Insider & Institutional Ownership

63.0% of Kinder Morgan shares are owned by institutional investors. Comparatively, 73.9% of Antero Midstream GP shares are owned by institutional investors. 14.2% of Kinder Morgan shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Kinder Morgan and Antero Midstream GP’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Kinder Morgan 1.95% 4.57% 2.05%
Antero Midstream GP 21.79% 116.75% 62.16%

Earnings & Valuation

This table compares Kinder Morgan and Antero Midstream GP’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Kinder Morgan $13.71 billion 2.64 $183.00 million $0.66 24.85
Antero Midstream GP $69.72 million 47.64 $2.32 million $0.03 594.67

Kinder Morgan has higher revenue and earnings than Antero Midstream GP. Kinder Morgan is trading at a lower price-to-earnings ratio than Antero Midstream GP, indicating that it is currently the more affordable of the two stocks.

Dividends

Kinder Morgan pays an annual dividend of $0.80 per share and has a dividend yield of 4.9%. Antero Midstream GP pays an annual dividend of $0.43 per share and has a dividend yield of 2.4%. Kinder Morgan pays out 121.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Antero Midstream GP pays out 1,433.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Kinder Morgan is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of current ratings and target prices for Kinder Morgan and Antero Midstream GP, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kinder Morgan 0 5 15 0 2.75
Antero Midstream GP 0 5 11 1 2.76

Kinder Morgan presently has a consensus target price of $21.45, suggesting a potential upside of 30.82%. Antero Midstream GP has a consensus target price of $24.53, suggesting a potential upside of 37.50%. Given Antero Midstream GP’s stronger consensus rating and higher possible upside, analysts clearly believe Antero Midstream GP is more favorable than Kinder Morgan.

Summary

Antero Midstream GP beats Kinder Morgan on 9 of the 16 factors compared between the two stocks.

About Kinder Morgan

Kinder Morgan, Inc. operates as an energy infrastructure company in North America. It operates through Natural Gas Pipelines, CO2, Terminals, Products Pipelines, and Kinder Morgan Canada segments. The Natural Gas Pipelines segment owns and operates interstate and intrastate natural gas pipeline and storage systems; natural gas and crude oil gathering systems, and natural gas processing and treating facilities; natural gas liquids (NGL) fractionation facilities and transportation systems; and liquefied natural gas facilities. The CO2 segment produces, transports, and markets CO2 for recovering crude oil from mature oil fields; and owns interests in/or operates oil fields and gas processing plants, as well as operates a crude oil pipeline system in West Texas. The Terminals segment owns and operates liquids and bulk terminals that transload and store refined petroleum products, crude oil, chemicals, and ethanol, as well as bulk products, including coke, steel, and coal; and owns tankers. The Products Pipelines segment owns and operates refined petroleum products, NGL, and crude oil and condensate pipelines; and associated product terminals and petroleum pipeline transmix facilities. The Kinder Morgan Canada segment owns and operates Trans Mountain pipeline system that transports crude oil and refined petroleum products from Edmonton, Alberta, and Canada to marketing terminals and refineries in British Columbia, Canada, and the state of Washington; and Jet Fuel aviation turbine fuel pipeline that serves the Vancouver (Canada) International Airport. As of February 5, 2018, Kinder Morgan, Inc. owns or operates approximately 85,000 miles of pipelines and 152 terminals. The company was formerly known as Kinder Morgan Holdco LLC and changed its name to Kinder Morgan, Inc. in February 2011. Kinder Morgan, Inc. was founded in 1936 and is headquartered in Houston, Texas.

About Antero Midstream GP

Antero Midstream GP LP owns, operates, and develops midstream energy assets in the Marcellus and Utica Shales in West Virginia and Ohio. Its assets consist of gathering pipelines, compressor stations, interests in processing and fractionation plants, and water handling and treatment assets, which provide midstream services to Antero Resources Corporation under long term fixed fee contracts. The company was formerly known as Antero Resources Midstream Management LLC and changed its name to Antero Midstream GP LP in May 2017. Antero Midstream GP LP was founded in 2013 and is based in Denver, Colorado.

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



Leave a Reply