Western Gas Equity Partners (NYSE: WGP) and Hess (NYSE:HES) are both oils/energy companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, analyst recommendations, risk, valuation, earnings, dividends and profitability.
Volatility & Risk
Western Gas Equity Partners has a beta of 1.47, suggesting that its share price is 47% more volatile than the S&P 500. Comparatively, Hess has a beta of 1.6, suggesting that its share price is 60% more volatile than the S&P 500.
This table compares Western Gas Equity Partners and Hess’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Western Gas Equity Partners||$2.25 billion||3.53||$376.60 million||$1.72||21.07|
|Hess||$5.41 billion||2.82||-$4.07 billion||($8.42)||-5.75|
Western Gas Equity Partners has higher earnings, but lower revenue than Hess. Hess is trading at a lower price-to-earnings ratio than Western Gas Equity Partners, indicating that it is currently the more affordable of the two stocks.
Western Gas Equity Partners pays an annual dividend of $2.19 per share and has a dividend yield of 6.0%. Hess pays an annual dividend of $1.00 per share and has a dividend yield of 2.1%. Western Gas Equity Partners pays out 127.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Hess pays out -11.9% of its earnings in the form of a dividend. Hess has raised its dividend for 4 consecutive years.
This is a summary of recent ratings for Western Gas Equity Partners and Hess, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Western Gas Equity Partners||0||3||7||0||2.70|
Western Gas Equity Partners presently has a consensus price target of $49.78, suggesting a potential upside of 37.36%. Hess has a consensus price target of $52.24, suggesting a potential upside of 7.93%. Given Western Gas Equity Partners’ stronger consensus rating and higher probable upside, analysts plainly believe Western Gas Equity Partners is more favorable than Hess.
Insider and Institutional Ownership
17.9% of Western Gas Equity Partners shares are owned by institutional investors. Comparatively, 92.4% of Hess shares are owned by institutional investors. 11.8% of Hess shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
This table compares Western Gas Equity Partners and Hess’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Western Gas Equity Partners||16.75%||9.40%||4.81%|
Western Gas Equity Partners beats Hess on 11 of the 17 factors compared between the two stocks.
About Western Gas Equity Partners
Western Gas Equity Partners, LP is a limited partnership. The Company is formed to own approximately three types of partnership interests in Western Gas Partners, LP (WES). WES is an master limited partnership (MLP) engaged in the business of gathering, compressing, treating, processing and transporting natural gas, and gathering, stabilizing and transporting condensate, natural gas liquids (NGLs) and crude oil. WES provides these midstream services for Anadarko Petroleum Corporation (Anadarko), as well as for third-party producers and customers. Its assets and investments are located in the Rocky Mountains (Colorado, Utah and Wyoming), North-central Pennsylvania and Texas. The Bison treating facility treats and compresses gas from coal-bed methane wells in the Powder River Basin of Wyoming. MIGC, LLC receives gas from various coal-bed methane gathering systems in the Powder River Basin and the Hilight system, as well as from WBI Energy Transmission, Inc.
Hess Corporation is an exploration and production company. The Company is engaged in exploration, development, production, transportation, purchase and sale of crude oil, natural gas liquids (NGL) and natural gas. The Company’s segments include Exploration and Production, and Bakken Midstream. Its Exploration and Production segment explores for, develops, produces, purchases and sells crude oil, NGLs and natural gas with production operations primarily in the United States, Denmark, the Malaysia/Thailand Joint Development Area (JDA), Malaysia and Norway. The Bakken Midstream segment provides fee-based services, including crude oil and natural gas gathering, processing of natural gas and the fractionation of NGLs, transportation of crude oil by rail car, terminaling and loading crude oil and NGLs, and the storage and terminaling of propane, primarily in the Bakken shale play of North Dakota.
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