Financial Review: Cheniere Energy Partners (NYSE:CQP) and ONE Gas (NYSE:OGS)

ONE Gas (NYSE:OGS) and Cheniere Energy Partners (NYSE:CQP) are both utilities companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, valuation, earnings, profitability, institutional ownership, risk and dividends.

Dividends

ONE Gas pays an annual dividend of $2.64 per share and has a dividend yield of 3.9%. Cheniere Energy Partners pays an annual dividend of $3.10 per share and has a dividend yield of 5.9%. ONE Gas pays out 68.8% of its earnings in the form of a dividend. Cheniere Energy Partners pays out 67.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Cheniere Energy Partners is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares ONE Gas and Cheniere Energy Partners’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ONE Gas	10.52%	7.71%	2.76%
Cheniere Energy Partners	31.28%	-328.60%	13.93%

Volatility and Risk

ONE Gas has a beta of 0.7, suggesting that its share price is 30% less volatile than the S&P 500. Comparatively, Cheniere Energy Partners has a beta of 0.73, suggesting that its share price is 27% less volatile than the S&P 500.

Institutional & Insider Ownership

88.7% of ONE Gas shares are owned by institutional investors. Comparatively, 46.5% of Cheniere Energy Partners shares are owned by institutional investors. 1.4% of ONE Gas shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares ONE Gas and Cheniere Energy Partners”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ONE Gas	$2.06 billion	1.84	$231.23 million	$3.84	17.44
Cheniere Energy Partners	$8.93 billion	2.85	$4.25 billion	$4.63	11.34

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

Analyst Recommendations

This is a summary of recent recommendations and price targets for ONE Gas and Cheniere Energy Partners, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ONE Gas	1	5	2	0	2.13
Cheniere Energy Partners	2	0	0	0	1.00

ONE Gas presently has a consensus target price of $72.69, suggesting a potential upside of 8.55%. Cheniere Energy Partners has a consensus target price of $50.50, suggesting a potential downside of 3.79%. Given ONE Gas’ stronger consensus rating and higher possible upside, analysts plainly believe ONE Gas is more favorable than Cheniere Energy Partners.

Summary

Cheniere Energy Partners beats ONE Gas on 9 of the 16 factors compared between the two stocks.

About ONE Gas

ONE Gas, Inc., together with its subsidiaries, operates as a regulated natural gas distribution company in the United States. The company provides natural gas distribution services to approximately 2.3 million customers in Oklahoma, Kansas, and Texas. It serves residential, commercial, and transportation customers. The company was founded in 1906 and is headquartered in Tulsa, Oklahoma.

About Cheniere Energy Partners

Cheniere Energy Partners, L.P., through its subsidiaries, provides liquefied natural gas (LNG) to integrated energy companies, utilities, and energy trading companies worldwide. The company owns and operates natural gas liquefaction and export facility at the Sabine Pass LNG Terminal located in Cameron Parish, Louisiana. It also owns a natural gas supply pipeline that interconnects the Sabine Pass LNG terminal with various interstate pipelines. The company was founded in 2003 and is headquartered in Houston, Texas. Cheniere Energy Partners, L.P. is a subsidiary of Cheniere Energy, Inc.