Matador Resources (NYSE:MTDR) and Hess Midstream (NYSE:HESM) Financial Survey

Matador Resources (NYSE:MTDR) and Hess Midstream (NYSE:HESM) are both mid-cap oils/energy companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, earnings, valuation, profitability, risk and dividends.

Insider & Institutional Ownership

92.0% of Matador Resources shares are held by institutional investors. Comparatively, 99.0% of Hess Midstream shares are held by institutional investors. 6.1% of Matador Resources shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Volatility and Risk

Matador Resources has a beta of 3.22, meaning that its stock price is 222% more volatile than the S&P 500. Comparatively, Hess Midstream has a beta of 1.53, meaning that its stock price is 53% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and price targets for Matador Resources and Hess Midstream, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Matador Resources	0	1	13	0	2.93
Hess Midstream	0	2	2	0	2.50

Matador Resources currently has a consensus price target of $75.14, suggesting a potential upside of 32.57%. Hess Midstream has a consensus price target of $41.50, suggesting a potential upside of 2.67%. Given Matador Resources’ stronger consensus rating and higher possible upside, equities research analysts plainly believe Matador Resources is more favorable than Hess Midstream.

Dividends

Matador Resources pays an annual dividend of $1.00 per share and has a dividend yield of 1.8%. Hess Midstream pays an annual dividend of $2.74 per share and has a dividend yield of 6.8%. Matador Resources pays out 13.2% of its earnings in the form of a dividend. Hess Midstream pays out 110.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Matador Resources	27.45%	20.01%	10.67%
Hess Midstream	14.92%	54.59%	5.55%

Valuation and Earnings

This table compares Matador Resources and Hess Midstream”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Matador Resources	$2.81 billion	2.52	$846.07 million	$7.55	7.51
Hess Midstream	$1.50 billion	5.89	$223.10 million	$2.49	16.23

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

Summary

Matador Resources beats Hess Midstream on 11 of the 16 factors compared between the two stocks.

About Matador Resources

Matador Resources Company, an independent energy company, engages in the exploration, development, production, and acquisition of oil and natural gas resources in the United States. It operates through two segments, Exploration and Production; and Midstream. The company primarily holds interests in the Wolfcamp and Bone Spring plays in the Delaware Basin in Southeast New Mexico and West Texas. It also operates the Eagle Ford shale play in South Texas; and the Haynesville shale and Cotton Valley plays in Northwest Louisiana. In addition, the company conducts midstream operations in support of its exploration, development, and production operations. Further, it provides natural gas processing and oil transportation services; and oil, natural gas, and produced water gathering services, as well as produced water disposal services to third parties. The company sells natural gas to unaffiliated independent marketing companies and unaffiliated midstream companies. The company was formerly known as Matador Holdco, Inc. and changed its name to Matador Resources Company in August 2011. Matador Resources Company was founded in 2003 and is headquartered in Dallas, Texas.

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.