Analyzing Gibson Energy (OTCMKTS:GBNXF) and Hess Midstream Partners (NYSE:HESM)

Hess Midstream Partners (NYSE:HESM) and Gibson Energy (OTCMKTS:GBNXF) are both mid-cap energy companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, dividends, profitability, earnings, analyst recommendations, valuation and institutional ownership.

Volatility & Risk

Hess Midstream Partners has a beta of 0.58, meaning that its share price is 42% less volatile than the S&P 500. Comparatively, Gibson Energy has a beta of 0.65, meaning that its share price is 35% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Hess Midstream Partners and Gibson Energy, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hess Midstream Partners	3	3	1	0	1.71
Gibson Energy	0	4	4	1	2.67

Hess Midstream Partners presently has a consensus price target of $37.00, suggesting a potential downside of 2.01%. Given Hess Midstream Partners’ higher possible upside, equities analysts plainly believe Hess Midstream Partners is more favorable than Gibson Energy.

Insider & Institutional Ownership

99.0% of Hess Midstream Partners shares are owned by institutional investors. Comparatively, 0.2% of Gibson Energy shares are owned by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

Hess Midstream Partners pays an annual dividend of $3.16 per share and has a dividend yield of 8.4%. Gibson Energy pays an annual dividend of $1.30 per share and has a dividend yield of 5.9%. 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. Gibson Energy pays out 183.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Hess Midstream Partners has raised its dividend for 8 consecutive years. Hess Midstream Partners is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares Hess Midstream Partners and Gibson Energy”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hess Midstream Partners	$1.62 billion	4.80	$352.90 million	$2.90	13.02
Gibson Energy	$7.65 billion	0.50	$141.45 million	$0.71	30.93

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

Profitability

This table compares Hess Midstream Partners and Gibson Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hess Midstream Partners	23.23%	92.18%	8.62%
Gibson Energy	1.32%	18.20%	3.41%

Summary

Hess Midstream Partners beats Gibson Energy on 11 of the 17 factors compared between the two stocks.

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.

About Gibson Energy

Gibson Energy Inc., together with its subsidiaries, engages in the gathering, storage, optimization, processing, and marketing of liquids and refined products in Canada and the United States. It operates through Infrastructure and Marketing segments. The Infrastructure segment operates a network of liquid infrastructure assets that include oil terminals, rail loading and unloading facilities, gathering pipelines, a crude oil processing facility, and other terminals. The Marketing segment purchases, sells, stores, and optimizes hydrocarbon products, including crude oil, natural gas liquids, road asphalt, roofing flux, frac oils, light and heavy straight run distillates, vacuum gas oil, and an oil-based mud product. It serves producers, refiners, marketers, and integrated companies, as well as exploration and production companies. The company was formerly known as Gibson Energy Holdings ULC and changed its name to Gibson Energy Inc. in April 2011. Gibson Energy Inc. was founded in 1953 and is headquartered in Calgary, Canada.