Hess Midstream (NYSE:HESM) and Northern Oil and Gas (NYSE:NOG) Head-To-Head Comparison

Hess Midstream (NYSE:HESM) and Northern Oil and Gas (NYSE:NOG) are both mid-cap oils/energy companies, but which is the better investment? We will compare the two companies based on the strength of their valuation, institutional ownership, profitability, earnings, dividends, risk and analyst recommendations.

Dividends

Hess Midstream pays an annual dividend of $2.54 per share and has a dividend yield of 7.5%. Northern Oil and Gas pays an annual dividend of $1.60 per share and has a dividend yield of 4.0%. Hess Midstream pays out 114.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Northern Oil and Gas pays out 25.9% of its earnings in the form of a dividend. Hess Midstream has increased its dividend for 7 consecutive years and Northern Oil and Gas has increased its dividend for 2 consecutive years. Hess Midstream is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares Hess Midstream and Northern Oil and Gas’ gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hess Midstream	$1.35 billion	5.69	$118.60 million	$2.21	15.35
Northern Oil and Gas	$2.17 billion	1.86	$922.97 million	$6.17	6.48

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

Profitability

This table compares Hess Midstream and Northern Oil and Gas’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hess Midstream	10.18%	34.38%	3.81%
Northern Oil and Gas	30.01%	34.06%	13.70%

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Hess Midstream and Northern Oil and Gas, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hess Midstream	0	3	3	0	2.50
Northern Oil and Gas	1	2	7	1	2.73

Hess Midstream currently has a consensus target price of $36.50, indicating a potential upside of 7.57%. Northern Oil and Gas has a consensus target price of $47.40, indicating a potential upside of 18.59%. Given Northern Oil and Gas’ stronger consensus rating and higher probable upside, analysts clearly believe Northern Oil and Gas is more favorable than Hess Midstream.

Insider & Institutional Ownership

92.4% of Hess Midstream shares are owned by institutional investors. Comparatively, 98.8% of Northern Oil and Gas shares are owned by institutional investors. 2.8% of Northern Oil and Gas shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Volatility and Risk

Hess Midstream has a beta of 1.51, indicating that its share price is 51% more volatile than the S&P 500. Comparatively, Northern Oil and Gas has a beta of 1.84, indicating that its share price is 84% more volatile than the S&P 500.

Summary

Northern Oil and Gas beats Hess Midstream on 13 of the 18 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 Northern Oil and Gas

Northern Oil and Gas, Inc., an independent energy company, engages in the acquisition, exploration, exploitation, development, and production of crude oil and natural gas properties in the United States. It primarily holds interests in the Williston Basin, the Appalachian Basin, and the Permian Basin in the United States. The company is based in Minnetonka, Minnesota.