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

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

Dividends

Northern Oil and Gas pays an annual dividend of $1.60 per share and has a dividend yield of 3.7%. Hess Midstream pays an annual dividend of $2.54 per share and has a dividend yield of 7.3%. Northern Oil and Gas pays out 15.9% of its earnings in the form of a dividend. 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 has raised its dividend for 2 consecutive years and Hess Midstream has raised its dividend for 7 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 Northern Oil and Gas and Hess Midstream’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Northern Oil and Gas	$2.17 billion	2.02	$922.97 million	$10.04	4.31
Hess Midstream	$1.35 billion	5.86	$118.60 million	$2.21	15.80

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.

Analyst Ratings

This is a summary of recent ratings for Northern Oil and Gas and Hess Midstream, as provided by MarketBeat.

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

Northern Oil and Gas currently has a consensus price target of $47.30, indicating a potential upside of 9.31%. Hess Midstream has a consensus price target of $35.67, indicating a potential upside of 2.17%. Given Northern Oil and Gas’ stronger consensus rating and higher possible upside, equities analysts clearly believe Northern Oil and Gas is more favorable than Hess Midstream.

Volatility & Risk

Northern Oil and Gas has a beta of 1.86, indicating that its share price is 86% more volatile than the S&P 500. Comparatively, Hess Midstream has a beta of 1.5, indicating that its share price is 50% more volatile than the S&P 500.

Insider & Institutional Ownership

98.8% of Northern Oil and Gas shares are owned by institutional investors. Comparatively, 92.4% of Hess Midstream 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 hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Northern Oil and Gas	42.61%	40.86%	15.31%
Hess Midstream	10.18%	34.38%	3.81%

Summary

Northern Oil and Gas beats Hess Midstream on 14 of the 18 factors compared between the two stocks.

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.

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.