Head to Head Comparison: EQT Midstream Partners (EQM) & ONEOK (OKE)

EQT Midstream Partners (NYSE: EQM) and ONEOK (NYSE:OKE) are both mid-cap oils/energy companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, profitability, analyst recommendations, dividends, institutional ownership, valuation and risk.

Analyst Recommendations

This is a breakdown of recent recommendations for EQT Midstream Partners and ONEOK, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
EQT Midstream Partners 0 2 6 0 2.75
ONEOK 0 8 5 0 2.38

EQT Midstream Partners presently has a consensus price target of $90.83, suggesting a potential upside of 25.27%. ONEOK has a consensus price target of $58.42, suggesting a potential upside of 10.76%. Given EQT Midstream Partners’ stronger consensus rating and higher possible upside, equities analysts clearly believe EQT Midstream Partners is more favorable than ONEOK.

Valuation & Earnings

This table compares EQT Midstream Partners and ONEOK’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
EQT Midstream Partners $735.61 million 7.94 $537.95 million $5.22 13.89
ONEOK $8.92 billion 2.27 $352.03 million $1.60 32.96

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

Profitability

This table compares EQT Midstream Partners and ONEOK’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
EQT Midstream Partners 65.99% 25.85% 16.59%
ONEOK 3.76% 9.25% 2.53%

Risk and Volatility

EQT Midstream Partners has a beta of 0.89, indicating that its share price is 11% less volatile than the S&P 500. Comparatively, ONEOK has a beta of 1.26, indicating that its share price is 26% more volatile than the S&P 500.

Institutional & Insider Ownership

73.7% of EQT Midstream Partners shares are held by institutional investors. Comparatively, 71.0% of ONEOK shares are held by institutional investors. 1.0% of ONEOK shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Dividends

EQT Midstream Partners pays an annual dividend of $3.92 per share and has a dividend yield of 5.4%. ONEOK pays an annual dividend of $2.98 per share and has a dividend yield of 5.7%. EQT Midstream Partners pays out 75.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. ONEOK pays out 186.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. EQT Midstream Partners has increased its dividend for 4 consecutive years and ONEOK has increased its dividend for 14 consecutive years. ONEOK is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

EQT Midstream Partners beats ONEOK on 11 of the 17 factors compared between the two stocks.

EQT Midstream Partners Company Profile

EQT Midstream Partners, LP (EQM) owns, operates, acquires and develops midstream assets in the Appalachian Basin. The Company’s segments include Gathering and Transmission. The Gathering segment primarily includes high pressure gathering lines and the Federal Energy Regulatory Commission (FERC)-regulated low pressure gathering system. Transmission includes EQM’s FERC-regulated interstate pipeline and storage business. The Company’s operations are primarily focused in southwestern Pennsylvania and northern West Virginia. As of December 31, 2016, the Company provided midstream services to EQT Corporation (EQT) and a range of third parties across 24 counties in Pennsylvania, West Virginia and Ohio through its two assets: the gathering system, which delivered natural gas from wells and other receipt points to transmission pipelines, and the transmission and storage system, which served as a header system transmission pipeline.

ONEOK Company Profile

ONEOK, Inc. is an energy midstream service provider in the United States. The Company owns and operates natural gas liquids (NGL) systems, and is engaged in the gathering, processing, storage and transportation of natural gas. THe Company’s operations include a 38,000-mile integrated network of NGL and natural gas pipelines, processing plants, fractionators and storage facilities in the Mid-Continent, Williston, Permian and Rocky Mountain regions. The Company operates through three business segments. The Natural Gas Gathering and Processing segment provides midstream services to contracted producers in North Dakota, Montana, Wyoming, Kansas and Oklahoma. The Natural Gas Liquids segment owns and operates facilities that gather, fractionate, treat and distribute NGLs and store NGL products primarily in the Mid-Continental, Permian Basin and the Rocky Mountain regions. The Natural Gas Pipelines segment provides transportation and storage services to end users.

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