Critical Survey: Rice Midstream Partners (RMP) vs. Dynagas LNG Partners (DLNG)

Rice Midstream Partners (NYSE: RMP) and Dynagas LNG Partners (NYSE:DLNG) are both small-cap oils/energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, profitability, analyst recommendations, institutional ownership, earnings, valuation and risk.

Dividends

Rice Midstream Partners pays an annual dividend of $1.08 per share and has a dividend yield of 5.4%. Dynagas LNG Partners pays an annual dividend of $1.69 per share and has a dividend yield of 12.9%. Rice Midstream Partners pays out 70.1% of its earnings in the form of a dividend. Dynagas LNG Partners pays out 176.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Volatility & Risk

Rice Midstream Partners has a beta of 1.3, meaning that its share price is 30% more volatile than the S&P 500. Comparatively, Dynagas LNG Partners has a beta of 1.1, meaning that its share price is 10% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Rice Midstream Partners and Dynagas LNG Partners, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Rice Midstream Partners 0 12 3 0 2.20
Dynagas LNG Partners 0 2 3 0 2.60

Rice Midstream Partners presently has a consensus target price of $21.29, indicating a potential upside of 6.11%. Dynagas LNG Partners has a consensus target price of $17.20, indicating a potential upside of 31.70%. Given Dynagas LNG Partners’ stronger consensus rating and higher probable upside, analysts plainly believe Dynagas LNG Partners is more favorable than Rice Midstream Partners.

Earnings and Valuation

This table compares Rice Midstream Partners and Dynagas LNG Partners’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Rice Midstream Partners $235.66 million 8.71 $180.22 million $1.54 13.03
Dynagas LNG Partners $155.54 million 2.98 $111.30 million $0.96 13.60

Rice Midstream Partners has higher revenue and earnings than Dynagas LNG Partners. Rice Midstream Partners is trading at a lower price-to-earnings ratio than Dynagas LNG Partners, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Rice Midstream Partners and Dynagas LNG Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Rice Midstream Partners 58.22% 12.71% 10.92%
Dynagas LNG Partners 26.03% 19.22% 5.02%

Insider & Institutional Ownership

19.6% of Dynagas LNG Partners shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

Rice Midstream Partners beats Dynagas LNG Partners on 9 of the 14 factors compared between the two stocks.

About Rice Midstream Partners

Rice Midstream Partners LP owns, operates, develops and acquires midstream assets in the Appalachian Basin. The Company’s segments are gathering and compression, and water services. The gathering and compression segment provides natural gas gathering and compression services for Rice Energy Inc. (Rice Energy) and third parties in the Appalachian Basin. The water services segment provides water services to support well completion activities, and to collect and recycle or dispose of flowback and produced water for Rice Energy and third parties in the Appalachian Basin. Its gas gathering and compression assets are located within the dry gas core of the Marcellus Shale and, consists of approximately 3.3 million dekatherms per day (MMDth/d) high-pressure dry gas gathering system and associated compression in Washington County, Pennsylvania, and an approximately 840 thousand dekatherms per day (MDth/d) high-pressure dry gas gathering system in Greene County, Pennsylvania.

About Dynagas LNG Partners

Dynagas LNG Partners LP is a limited partnership, which focuses on owning and operating liquid natural gas (LNG) carriers. The Company’s vessels are employed on multi-year time charters with international energy companies. As of December 31, 2016, the Company owned and operated a fleet of six LNG carriers, consisting of the three LNG carriers in its Initial Fleet, the Clean Energy, the Ob River and the Amur River, and three 2013-built Ice Class LNG carriers that the Company acquired from its Sponsor the Arctic Aurora, the Yenisei River, and the Lena River (collectively referred as its Fleet). The vessels in its Fleet have an average age of 6.6 years and are contracted under multi-year charters with Shell, Gazprom, Statoil and Yamal with an average remaining charter term, as of March 17, 2017, of approximately 10.6 years, including the charter agreements relating to the Yenisei River and the Lena River with Yamal. The Company’s Fleet is managed by its manager, Dynagas Ltd.

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