Alvopetro Energy (OTCMKTS:ALVOF) and Hess Midstream (NYSE:HESM) Critical Contrast

Hess Midstream (NYSE:HESM) and Alvopetro Energy (OTCMKTS:ALVOF) are both oils/energy companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, risk, valuation, dividends and profitability.

Dividends

Hess Midstream pays an annual dividend of $2.61 per share and has a dividend yield of 7.0%. Alvopetro Energy pays an annual dividend of $0.36 per share and has a dividend yield of 10.2%. Hess Midstream pays out 118.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Alvopetro Energy pays out 65.5% of its earnings in the form of a dividend. Alvopetro Energy is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a summary of recent recommendations for Hess Midstream and Alvopetro Energy, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hess Midstream	0	3	3	0	2.50
Alvopetro Energy	0	0	0	0	N/A

Hess Midstream currently has a consensus price target of $36.83, indicating a potential downside of 1.33%. Given Hess Midstream’s higher probable upside, equities analysts plainly believe Hess Midstream is more favorable than Alvopetro Energy.

Profitability

This table compares Hess Midstream and Alvopetro Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hess Midstream	10.18%	35.08%	3.78%
Alvopetro Energy	39.18%	33.00%	26.54%

Insider and Institutional Ownership

92.4% of Hess Midstream shares are held by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Hess Midstream and Alvopetro Energy’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hess Midstream	$1.35 billion	6.18	$118.60 million	$2.21	16.86
Alvopetro Energy	$59.69 million	2.16	$28.52 million	$0.55	6.40

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

Risk and Volatility

Hess Midstream has a beta of 1.52, meaning that its share price is 52% more volatile than the S&P 500. Comparatively, Alvopetro Energy has a beta of 0.19, meaning that its share price is 81% less volatile than the S&P 500.

Summary

Hess Midstream beats Alvopetro Energy on 10 of the 14 factors compared between the two stocks.

About Hess Midstream

Hess Midstream LP owns, develops, operates, and acquires midstream assets and provide fee-based services to Hess and third-party customers in the United States. It operates through three segments: Gathering; Processing and Storage; and Terminaling and Export. The Gathering segment owns natural gas gathering and compression systems; crude oil gathering systems; and produced water gathering and disposal facilities. Its gathering systems consists of approximately 1,410 miles of high and low pressure natural gas and natural gas liquids gathering pipelines with capacity of approximately 660 million cubic feet per day; crude oil gathering system comprises approximately 570 miles of crude oil gathering pipelines; and produced water gathering system that includes approximately 300 miles of pipelines in gathering systems. The Processing and Storage segment comprises Tioga Gas Plant, a natural gas processing and fractionation plant located in Tioga, North Dakota; a 50% interest in the Little Missouri 4 gas processing plant located in south of the Missouri River in McKenzie County, North Dakota; and Mentor Storage Terminal, a propane storage cavern and rail, and truck loading and unloading facility located in Mentor, Minnesota. The Terminaling and Export segment owns Ramberg terminal facility; Tioga rail terminal; crude oil rail cars; and other Dakota access pipeline connections, as well as Johnson's Corner Header System, a crude oil pipeline header system. Hess Midstream LP was founded in 2014 and is based in Houston, Texas.

About Alvopetro Energy

Alvopetro Energy Ltd. engages in the acquisition, exploration, development, and production of hydrocarbons. It holds interests in the Caburé and Murucututu natural gas assets, Block 182 and 183 exploration assets, and Bom Lugar and Mãe-da-lua oil fields, which covers an area of approximately 22,166 acres in the Recôncavo basin onshore Brazil. The company was incorporated in 2013 and is headquartered in Calgary, Canada.