Head-To-Head Analysis: National Grid (NGG) and Antero Midstream GP (AMGP)

National Grid (NYSE: NGG) and Antero Midstream GP (NYSE:AMGP) are both utilities companies, but which is the superior investment? We will compare the two companies based on the strength of their analyst recommendations, dividends, valuation, earnings, profitability, risk and institutional ownership.

Dividends

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National Grid pays an annual dividend of $1.87 per share and has a dividend yield of 3.2%. Antero Midstream GP pays an annual dividend of $0.30 per share and has a dividend yield of 1.9%. National Grid pays out 37.9% of its earnings in the form of a dividend. Antero Midstream GP pays out 1,000.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. National Grid is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a summary of recent recommendations for National Grid and Antero Midstream GP, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
National Grid 0 5 7 0 2.58
Antero Midstream GP 0 5 11 1 2.76

National Grid presently has a consensus target price of $69.00, suggesting a potential upside of 17.31%. Antero Midstream GP has a consensus target price of $24.53, suggesting a potential upside of 54.27%. Given Antero Midstream GP’s stronger consensus rating and higher probable upside, analysts plainly believe Antero Midstream GP is more favorable than National Grid.

Valuation and Earnings

This table compares National Grid and Antero Midstream GP’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
National Grid $18.62 billion 2.13 $10.19 billion $4.93 11.93
Antero Midstream GP $69.72 million 42.46 $2.32 million $0.03 530.00

National Grid has higher revenue and earnings than Antero Midstream GP. National Grid is trading at a lower price-to-earnings ratio than Antero Midstream GP, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares National Grid and Antero Midstream GP’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
National Grid N/A N/A N/A
Antero Midstream GP 4.58% 22.05% 11.93%

Institutional & Insider Ownership

5.4% of National Grid shares are owned by institutional investors. Comparatively, 73.0% of Antero Midstream GP shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

Antero Midstream GP beats National Grid on 9 of the 14 factors compared between the two stocks.

National Grid Company Profile

National Grid plc transmits and distributes electricity and natural gas. It operates through UK Electricity Transmission, UK Gas Transmission, and US Regulated segments. The UK Electricity Transmission segment owns and operates electricity transmission networks, which comprise approximately 7,200 kilometers of overhead line; 1,500 kilometers of underground cable; and 342 substations located in England and Wales. It also operates the Scottish networks. The UK Gas Transmission segment owns and operates gas transmission systems that include approximately 7,660 kilometers of high pressure pipe and 618 above-ground installations in Great Britain. The US Regulated segment jointly owns and operates transmission facilities across upstate New York, Massachusetts, New Hampshire, Rhode Island, and Vermont; and owns and operates electricity distribution networks in upstate New York, Massachusetts, and Rhode Island. Its assets comprise 14,219 kilometers of overhead lines; 377 transmission substations; and 763 distribution substations. This segment also engages in owning and operating of gas distribution networks, which deliver gas to approximately 3.6 million customers in upstate New York, New York City, Long Island, Massachusetts, and Rhode Island. The company is also involved in gas metering, property management, liquefied natural gas (LNG) importation terminal, unregulated transmission pipeline, and LNG operations, as well as operates Great Britain-France interconnector. In addition, it owns and operates 21 megawatts of solar generation in Massachusetts. National Grid plc was founded in 1990 and is headquartered in London, the United Kingdom.

Antero Midstream GP Company Profile

Antero Midstream GP LP, formerly Antero Resources Midstream Management LLC, owns, operates and develops midstream energy infrastructure. The Company’s segments include gathering and processing and water handling and treatment. The gathering and processing segment consist of long-term, fee-based activities including low-pressure gathering, compression, high-pressure gathering, processing, fractionation, and condensate gathering. The Company’s water handling and treatment segment consists of long-term fee based activities including fresh water delivery used in completion activity, and water handling services. The Company’s assets are located both in the southwestern core of the Marcellus Shale in northwest West Virginia and in the core of the Utica Shale in southern Ohio.

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