EQGP (EQGP) and Kinder Morgan (KMI) Financial Contrast

Kinder Morgan (NYSE:KMI) and EQGP (NYSE:EQGP) are both oils/energy companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, risk, earnings, institutional ownership, analyst recommendations, valuation and profitability.

Insider and Institutional Ownership

65.3% of Kinder Morgan shares are owned by institutional investors. Comparatively, 8.9% of EQGP shares are owned by institutional investors. 14.0% of Kinder Morgan shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Dividends

Kinder Morgan pays an annual dividend of $1.00 per share and has a dividend yield of 4.9%. EQGP pays an annual dividend of $1.26 per share and has a dividend yield of 6.3%. Kinder Morgan pays out 112.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. EQGP pays out 128.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. EQGP has increased its dividend for 3 consecutive years. EQGP is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of current ratings and price targets for Kinder Morgan and EQGP, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kinder Morgan 1 3 12 0 2.69
EQGP 0 9 1 0 2.10

Kinder Morgan presently has a consensus target price of $21.80, indicating a potential upside of 7.44%. EQGP has a consensus target price of $22.49, indicating a potential upside of 12.64%. Given EQGP’s higher probable upside, analysts plainly believe EQGP is more favorable than Kinder Morgan.

Profitability

This table compares Kinder Morgan and EQGP’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Kinder Morgan 11.59% 6.13% 2.72%
EQGP 30.96% 10.93% 5.82%

Volatility & Risk

Kinder Morgan has a beta of 0.95, indicating that its stock price is 5% less volatile than the S&P 500. Comparatively, EQGP has a beta of 1.21, indicating that its stock price is 21% more volatile than the S&P 500.

Earnings & Valuation

This table compares Kinder Morgan and EQGP’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Kinder Morgan $14.14 billion 3.16 $1.61 billion $0.89 22.80
EQGP $834.10 million 7.24 $261.99 million $0.98 20.38

Kinder Morgan has higher revenue and earnings than EQGP. EQGP is trading at a lower price-to-earnings ratio than Kinder Morgan, indicating that it is currently the more affordable of the two stocks.

Summary

EQGP beats Kinder Morgan on 9 of the 17 factors compared between the two stocks.

About Kinder Morgan

Kinder Morgan, Inc. operates as an energy infrastructure company in North America. The company operates through Natural Gas Pipelines, Products Pipelines, Terminals, and CO2 segments. The Natural Gas Pipelines segment owns and operates interstate and intrastate natural gas pipeline and storage systems; natural gas and crude oil gathering systems, and natural gas processing and treating facilities; natural gas liquids (NGL) fractionation facilities and transportation systems; and liquefied natural gas facilities. The Products Pipelines segment owns and operates refined petroleum products, NGL, and crude oil and condensate pipelines; and associated product terminals and petroleum pipeline transmix facilities. The Terminals segment owns and/or operates liquids and bulk terminals that transload and store refined petroleum products, crude oil, ethanol, and chemicals, as well as bulk products, including coke, metals, and ores; and owns tankers. The CO2 segment produces, transports, and markets CO2 to recovery and production crude oil from mature oil fields; and owns interests in/or operates oil fields and gas processing plants, as well as operates a crude oil pipeline system in West Texas. The company owns an interest in or operates approximately 84,000 miles of pipelines and 153 terminals. The company was formerly known as Kinder Morgan Holdco LLC and changed its name to Kinder Morgan, Inc. in February 2011. Kinder Morgan, Inc. was founded in 1936 and is headquartered in Houston, Texas.

About EQGP

EQGP Holdings, LP owns, operates, acquires, and develops midstream energy assets in the Appalachian Basin through owning partnership interests in EQT Midstream Partners, LP (EQM). The company operates in two segments, Gathering and Transmission. EQM offers natural gas transmission, storage, and gathering services to various third parties in Pennsylvania, West Virginia, and Ohio. As of December 31, 2017, it owned and operated 300 miles of high pressure gathering lines and 1,500 miles of Federal Energy Regulatory Commission (FERC)-regulated low pressure gathering lines. EQGP Services, LLC serves as a general partner of the company. The company was formerly known as EQT GP Holdings, LP and changed its name to EQGP Holdings, LP in October 2018. The company was founded in 2015 and is headquartered in Pittsburgh, Pennsylvania. EQGP Holdings, LP operates as a subsidiary of Equitrans Midstream Corporation.

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