Analyzing Kinetik (NYSE:KNTK) and DHT (NYSE:DHT)

Kinetik (NYSE:KNTK) and DHT (NYSE:DHT) are both mid-cap energy companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, valuation, earnings, analyst recommendations, risk, institutional ownership and dividends.

Profitability

This table compares Kinetik and DHT’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Kinetik	25.65%	-42.78%	7.12%
DHT	73.81%	53.69%	38.19%

Dividends

Kinetik pays an annual dividend of $3.24 per share and has a dividend yield of 6.2%. DHT pays an annual dividend of $4.88 per share and has a dividend yield of 23.5%. Kinetik pays out 108.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. DHT pays out 166.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Kinetik has increased its dividend for 1 consecutive years.

Volatility & Risk

Kinetik has a beta of 0.67, indicating that its stock price is 33% less volatile than the S&P 500. Comparatively, DHT has a beta of -0.03, indicating that its stock price is 103% less volatile than the S&P 500.

Valuation and Earnings

This table compares Kinetik and DHT”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kinetik	$1.76 billion	4.79	$525.93 million	$2.99	17.41
DHT	$498.40 million	6.72	$211.09 million	$2.94	7.07

Kinetik has higher revenue and earnings than DHT. DHT is trading at a lower price-to-earnings ratio than Kinetik, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current recommendations and price targets for Kinetik and DHT, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kinetik	0	7	11	1	2.68
DHT	0	2	1	1	2.75

Kinetik currently has a consensus target price of $56.36, indicating a potential upside of 8.26%. DHT has a consensus target price of $27.00, indicating a potential upside of 29.89%. Given DHT’s stronger consensus rating and higher probable upside, analysts clearly believe DHT is more favorable than Kinetik.

Institutional & Insider Ownership

21.1% of Kinetik shares are owned by institutional investors. Comparatively, 58.5% of DHT shares are owned by institutional investors. 3.6% of Kinetik shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

Kinetik beats DHT on 9 of the 17 factors compared between the two stocks.

About Kinetik

Kinetik Holdings provides midstream services to oil and natural gas producers operating in the Permian Basin, with a focus on the Delaware Basin in West Texas and southeastern New Mexico. Its services connect producing wells to downstream markets and other energy infrastructure. The company’s operations include natural gas gathering, compression, processing and transportation, as well as crude oil gathering and produced-water gathering, recycling and disposal. Kinetik also provides related infrastructure and commercial services to its producer customers.

About DHT

DHT Holdings, Inc. is an independent crude oil tanker company that owns and operates vessels used to transport crude oil by sea. Its fleet consists primarily of very large crude carriers (VLCCs), which move large volumes of oil between production regions, refineries and other destinations. DHT’s vessels serve the global crude oil trade, operating on routes around the world. The company employs a mix of voyage and time charters, providing transportation services to oil companies, traders and other customers.