Analyzing Hess Midstream (NYSE:HESM) & Crescent Energy (NYSE:CRGY)

Crescent Energy (NYSE:CRGY) and Hess Midstream (NYSE:HESM) 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 profitability, earnings, risk, analyst recommendations, institutional ownership, dividends and valuation.

Institutional and Insider Ownership

52.1% of Crescent Energy shares are owned by institutional investors. Comparatively, 99.0% of Hess Midstream shares are owned by institutional investors. 13.2% of Crescent Energy shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Crescent Energy and Hess Midstream”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Crescent Energy	$2.38 billion	1.45	$67.61 million	$0.62	24.43
Hess Midstream	$1.50 billion	5.97	$223.10 million	$2.49	16.44

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

Risk and Volatility

Crescent Energy has a beta of 2.16, meaning that its stock price is 116% 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 Recommendations

This is a summary of recent ratings and recommmendations for Crescent Energy and Hess Midstream, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Crescent Energy	0	2	8	2	3.00
Hess Midstream	0	2	2	0	2.50

Crescent Energy presently has a consensus target price of $17.50, suggesting a potential upside of 15.55%. Hess Midstream has a consensus target price of $41.50, suggesting a potential upside of 1.37%. Given Crescent Energy’s stronger consensus rating and higher possible upside, research analysts clearly believe Crescent Energy is more favorable than Hess Midstream.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Crescent Energy	2.17%	12.53%	3.61%
Hess Midstream	14.92%	54.59%	5.55%

Dividends

Crescent Energy pays an annual dividend of $0.48 per share and has a dividend yield of 3.2%. Hess Midstream pays an annual dividend of $2.80 per share and has a dividend yield of 6.8%. Crescent Energy pays out 77.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Hess Midstream pays out 112.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

Crescent Energy beats Hess Midstream on 9 of the 17 factors compared between the two stocks.

About Crescent Energy

Crescent Energy Company acquires, develops, and produces crude oil, natural gas, and natural gas liquids (NGLs) reserves. Its portfolio of assets comprises mid-cycle unconventional and conventional assets in the Eagle Ford and Uinta Basins. It also owns and operates various midstream assets, which provide services to customers. The company is based in Houston, 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.