Tallgrass Energy (TGE) versus CNX Midstream Partners (CNXM) Head-To-Head Contrast

Tallgrass Energy (NYSE:TGE) and CNX Midstream Partners (NYSE:CNXM) are both oils/energy companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, profitability, dividends, analyst recommendations, institutional ownership, earnings and risk.

Insider & Institutional Ownership

24.3% of Tallgrass Energy shares are owned by institutional investors. Comparatively, 30.0% of CNX Midstream Partners shares are owned by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Volatility & Risk

Tallgrass Energy has a beta of 1.91, indicating that its share price is 91% more volatile than the S&P 500. Comparatively, CNX Midstream Partners has a beta of 1.7, indicating that its share price is 70% more volatile than the S&P 500.

Profitability

This table compares Tallgrass Energy and CNX Midstream Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Tallgrass Energy -18.21% 2.03% 0.87%
CNX Midstream Partners 46.16% 19.10% 12.51%

Valuation and Earnings

This table compares Tallgrass Energy and CNX Midstream Partners’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Tallgrass Energy $655.90 million 9.37 -$128.72 million $0.76 28.86
CNX Midstream Partners $233.85 million 5.04 $114.99 million $1.72 10.77

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

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Tallgrass Energy and CNX Midstream Partners, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Tallgrass Energy 0 3 4 0 2.57
CNX Midstream Partners 0 1 5 0 2.83

Tallgrass Energy currently has a consensus target price of $26.83, indicating a potential upside of 24.40%. CNX Midstream Partners has a consensus target price of $24.33, indicating a potential upside of 31.39%. Given CNX Midstream Partners’ stronger consensus rating and higher probable upside, analysts clearly believe CNX Midstream Partners is more favorable than Tallgrass Energy.

Dividends

Tallgrass Energy pays an annual dividend of $1.99 per share and has a dividend yield of 9.1%. CNX Midstream Partners pays an annual dividend of $1.34 per share and has a dividend yield of 7.2%. Tallgrass Energy pays out 261.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. CNX Midstream Partners pays out 77.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

CNX Midstream Partners beats Tallgrass Energy on 10 of the 15 factors compared between the two stocks.

Tallgrass Energy Company Profile

Tallgrass Energy, LP, through its interests in Tallgrass Equity, LLC, provides crude oil transportation services to customers in Wyoming, Colorado, and the surrounding regions of the United States. The company operates through three segments: Natural Gas Transportation; Crude Oil Transportation; and Gathering, Processing & Terminalling. It also provides natural gas transportation and storage services for customers in the Rocky Mountain, Midwest, and Appalachian regions; natural gas and crude oil gathering and processing services for customers in Wyoming; and natural gas liquids (NGLs) transportation services in Northeast Colorado and Wyoming. In addition, the company offers water business services, including freshwater transportation, and produced water gathering and disposal in Colorado, Texas, and Wyoming; crude oil storage and terminalling services in Colorado; and marketing services for NGLs and crude oil. The company was formerly known as Tallgrass Energy GP, LP and changed its name to Tallgrass Energy, LP in June 2018. Tallgrass Energy, LP was founded in 2013 and is based in Leawood, Kansas.

CNX Midstream Partners Company Profile

CNX Midstream Partners LP owns, operates, develops, and acquires natural gas gathering and other midstream energy assets in the Marcellus Shale and Utica Shale in Pennsylvania and West Virginia. As of December 31, 2017, the company operates 18 compression and dehydration facilities. It also operates condensate handling facilities with handling capacities of 2,500 Bbl/d each in Majorsville, Pennsylvania, as well as Moundsville, West Virginia that provide condensate gathering, collection, separation, and stabilization services. CNX Midstream GP LLC serves as a general partner of the company. The company was formerly known as CONE Midstream Partners LP and changed its name to CNX Midstream Partners LP in January 2018. CNX Midstream Partners LP was founded in 2014 and is based in Canonsburg, Pennsylvania.

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