Analyzing Antero Midstream GP (AMGP) and Antero Midstream Partners (AM)

Antero Midstream GP (NYSE: AM) and Antero Midstream Partners (NYSE:AM) are both mid-cap oils/energy companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, valuation, profitability, institutional ownership, risk, analyst recommendations and earnings.

Analyst Recommendations

This is a breakdown of current ratings for Antero Midstream GP and Antero Midstream Partners, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Antero Midstream GP 0 5 6 0 2.55
Antero Midstream Partners 0 3 9 0 2.75

Antero Midstream GP presently has a consensus target price of $22.73, indicating a potential upside of 19.55%. Antero Midstream Partners has a consensus target price of $35.35, indicating a potential upside of 13.16%. Given Antero Midstream GP’s higher probable upside, equities analysts clearly believe Antero Midstream GP is more favorable than Antero Midstream Partners.

Insider & Institutional Ownership

74.8% of Antero Midstream GP shares are held by institutional investors. Comparatively, 48.4% of Antero Midstream Partners shares are held by institutional investors. 7.9% of Antero Midstream Partners shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Risk and Volatility

Antero Midstream GP has a beta of 2.03, meaning that its stock price is 103% more volatile than the S&P 500. Comparatively, Antero Midstream Partners has a beta of 1.88, meaning that its stock price is 88% more volatile than the S&P 500.

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Antero Midstream GP $69.72 million 50.77 $2.32 million $0.03 633.67
Antero Midstream Partners $772.50 million 7.56 $307.31 million $1.40 22.31

Antero Midstream Partners has higher revenue and earnings than Antero Midstream GP. Antero Midstream Partners 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.

Dividends

Antero Midstream GP pays an annual dividend of $0.50 per share and has a dividend yield of 2.6%. Antero Midstream Partners pays an annual dividend of $1.66 per share and has a dividend yield of 5.3%. Antero Midstream GP pays out 1,666.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Antero Midstream Partners pays out 118.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Antero Midstream Partners has increased its dividend for 2 consecutive years. Antero Midstream Partners is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Antero Midstream GP 32.91% 199.85% 102.79%
Antero Midstream Partners 32.94% 20.54% 10.20%

Summary

Antero Midstream Partners beats Antero Midstream GP on 10 of the 17 factors compared between the two stocks.

Antero Midstream GP Company Profile

Antero Midstream GP LP owns, operates, and develops midstream energy assets in the Marcellus and Utica Shales in West Virginia and Ohio. Its assets consist of gathering pipelines, compressor stations, interests in processing and fractionation plants, and water handling and treatment assets, which provide midstream services to Antero Resources Corporation under long term fixed fee contracts. The company was formerly known as Antero Resources Midstream Management LLC and changed its name to Antero Midstream GP LP in May 2017. Antero Midstream GP LP was founded in 2013 and is based in Denver, Colorado.

Antero Midstream Partners Company Profile

Antero Midstream Partners LP owns, operates, and develops midstream energy assets. The company operates in two segments, Gathering and Processing, and Water Handling and Treatment. Its assets include 8-, 12-, 16-, 20-, 24-, and 30-inch high and low pressure gathering pipelines, compressor stations, and processing and fractionation plants that collect and process natural gas, natural gas liquids, and crude oil from wells in the Marcellus Shale in West Virginia and the Utica Shale in Ohio; and water handling and treatment assets, which comprise two independent fresh water delivery systems that deliver fresh water from the Ohio River and several regional waterways, as well as wastewater handling services for well completion operations. As of December 31, 2017, the company's Marcellus and Utica Shale water handling and treatment systems included 190 miles and 83 miles of pipelines, respectively; and gathering systems comprised 242 miles and 123 miles of pipelines, respectively. Antero Midstream Partners GP LLC serves as the general partner of the company. The company was founded in 2013 and is headquartered in Denver, Colorado. Antero Midstream Partners LP is a subsidiary of Antero Resources Corporation.

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