Rice Midstream Partners (RMP) and EQT Midstream Partners (EQM) Critical Review

Rice Midstream Partners (NYSE:RMP) and EQT Midstream Partners (NYSE:EQM) are both oils/energy companies, but which is the better business? We will compare the two businesses based on the strength of their risk, earnings, profitability, dividends, valuation, analyst recommendations and institutional ownership.

Dividends

Rice Midstream Partners pays an annual dividend of $1.22 per share and has a dividend yield of 0.1%. EQT Midstream Partners pays an annual dividend of $4.36 per share and has a dividend yield of 8.6%. EQT Midstream Partners pays out 84.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. EQT Midstream Partners has increased its dividend for 5 consecutive years. EQT Midstream Partners is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

74.1% of Rice Midstream Partners shares are held by institutional investors. Comparatively, 65.7% of EQT Midstream Partners shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

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

Net Margins Return on Equity Return on Assets
Rice Midstream Partners 59.40% 10.01% 8.61%
EQT Midstream Partners 63.76% 26.66% 13.89%

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Rice Midstream Partners $294.69 million 595.09 $177.97 million N/A N/A
EQT Midstream Partners $834.10 million 5.26 $571.90 million $5.19 9.78

EQT Midstream Partners has higher revenue and earnings than Rice Midstream Partners.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Rice Midstream Partners and EQT Midstream Partners, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Rice Midstream Partners 0 6 2 0 2.25
EQT Midstream Partners 0 5 10 0 2.67

Rice Midstream Partners presently has a consensus target price of $23.50, indicating a potential downside of 98.63%. EQT Midstream Partners has a consensus target price of $62.77, indicating a potential upside of 23.71%. Given EQT Midstream Partners’ stronger consensus rating and higher probable upside, analysts clearly believe EQT Midstream Partners is more favorable than Rice Midstream Partners.

Risk and Volatility

Rice Midstream Partners has a beta of 1.17, meaning that its share price is 17% more volatile than the S&P 500. Comparatively, EQT Midstream Partners has a beta of 1.07, meaning that its share price is 7% more volatile than the S&P 500.

Summary

EQT Midstream Partners beats Rice Midstream Partners on 10 of the 14 factors compared between the two stocks.

Rice Midstream Partners Company Profile

Rice Midstream Partners LP owns, operates, develops, and acquires midstream assets in the Appalachian Basin. It operates in two segments, Gathering and Compression, and Water Services. Its natural gas gathering and compression assets consist of natural gas gathering and compression systems that serve producers in the dry gas core of the Marcellus Shale in southwestern Pennsylvania. The company also provides water services to support well completion activities, as well as to collect and recycle or dispose of flowback and produced water in Washington and Greene counties, Pennsylvania; and Belmont County, Ohio. Rice Midstream Management LLC serves as the general partner of Rice Midstream Partners LP. The company was founded in 2014 and is headquartered in Pittsburgh, Pennsylvania.

EQT Midstream Partners Company Profile

EQT Midstream Partners, LP provides natural gas gathering, transmission, and storage services in Pennsylvania, West Virginia, and Ohio. The company owns, operates, acquires, and develops midstream assets in the Appalachian Basin. The company also owned approximately 300 miles of high pressure gathering lines and 1,500 miles of federal energy regulatory commission (FERC) regulated low pressure gathering lines; and approximately 950 miles of FERC regulated interstate pipelines. It serves local distribution companies, marketers, producers, and commercial and industrial users. EQT Midstream Services, LLC serves as the general partner of the company. EQT Midstream Partners, LP is headquartered in Pittsburgh, Pennsylvania.

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