Contrasting Anadarko Petroleum (NASDAQ:APC) and Hess Midstream Partners (NYSE:HESM)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Anadarko Petroleum	N/A	N/A	N/A
Hess Midstream Partners	23.23%	92.18%	8.62%

Institutional and Insider Ownership

99.0% of Hess Midstream Partners shares are held by institutional investors. 0.5% of Anadarko Petroleum shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent recommendations and price targets for Anadarko Petroleum and Hess Midstream Partners, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Anadarko Petroleum	1	1	4	1	2.71
Hess Midstream Partners	3	3	1	0	1.71

Anadarko Petroleum presently has a consensus price target of $21.80, indicating a potential upside of 40.65%. Hess Midstream Partners has a consensus price target of $37.00, indicating a potential downside of 2.01%. Given Anadarko Petroleum’s stronger consensus rating and higher possible upside, equities analysts clearly believe Anadarko Petroleum is more favorable than Hess Midstream Partners.

Valuation and Earnings

This table compares Anadarko Petroleum and Hess Midstream Partners”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Anadarko Petroleum	$5.58 billion	0.03	$32.73 million	$0.69	22.46
Hess Midstream Partners	$1.62 billion	4.80	$352.90 million	$2.90	13.02

Hess Midstream Partners has lower revenue, but higher earnings than Anadarko Petroleum. Hess Midstream Partners is trading at a lower price-to-earnings ratio than Anadarko Petroleum, indicating that it is currently the more affordable of the two stocks.

Dividends

Anadarko Petroleum pays an annual dividend of $2.00 per share and has a dividend yield of 12.9%. Hess Midstream Partners pays an annual dividend of $3.16 per share and has a dividend yield of 8.4%. Anadarko Petroleum pays out 289.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Hess Midstream Partners pays out 109.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Hess Midstream Partners has raised its dividend for 8 consecutive years.

Summary

Hess Midstream Partners beats Anadarko Petroleum on 9 of the 17 factors compared between the two stocks.

About Anadarko Petroleum

Anadarko Petroleum Corporation engages in the exploration, development, production, and marketing of oil and gas properties. It operates through three segments: Exploration and Production, WES Midstream, and Other Midstream. The company explores for and produces oil, natural gas, and natural gas liquids (NGLs). It is also involved in gathering, processing, treating, and transporting oil, natural-gas, and NGLs production, as well as the gathering and disposal of produced water. The company's oil and natural gas properties are located in the United States onshore and deepwater Gulf of Mexico; and Algeria, Ghana, Mozambique, Colombia, Peru, and other countries. As of December 31, 2018, it had approximately 1.5 billion barrels of oil equivalent of proved reserves. The company was founded in 1959 and is headquartered in The Woodlands, Texas.

About Hess Midstream Partners

Hess Midstream LP owns, develops, operates, and acquires midstream assets and provide fee-based services to Hess and third-party customers in the United States. It operates through three segments: Gathering; Processing and Storage; and Terminaling and Export. The Gathering segment owns natural gas gathering and compression systems; crude oil gathering systems; and produced water gathering and disposal facilities. Its gathering systems consists of approximately 1,410 miles of high and low pressure natural gas and natural gas liquids gathering pipelines with capacity of approximately 660 million cubic feet per day; crude oil gathering system comprises approximately 570 miles of crude oil gathering pipelines; and produced water gathering system that includes approximately 300 miles of pipelines in gathering systems. The Processing and Storage segment comprises Tioga Gas Plant, a natural gas processing and fractionation plant located in Tioga, North Dakota; a 50% interest in the Little Missouri 4 gas processing plant located in south of the Missouri River in McKenzie County, North Dakota; and Mentor Storage Terminal, a propane storage cavern and rail, and truck loading and unloading facility located in Mentor, Minnesota. The Terminaling and Export segment owns Ramberg terminal facility; Tioga rail terminal; crude oil rail cars; and other Dakota access pipeline connections, as well as Johnson's Corner Header System, a crude oil pipeline header system. Hess Midstream LP was founded in 2014 and is based in Houston, Texas.