Critical Analysis: DT Midstream (DTM) and Its Competitors

DT Midstream (NYSE:DTM – Get Rating) is one of 39 publicly-traded companies in the “Natural gas transmission” industry, but how does it contrast to its peers? We will compare DT Midstream to related companies based on the strength of its profitability, earnings, dividends, institutional ownership, analyst recommendations, valuation and risk.

Dividends

DT Midstream pays an annual dividend of $2.56 per share and has a dividend yield of 4.6%. DT Midstream pays out 80.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Natural gas transmission” companies pay a dividend yield of 6.7% and pay out 128.3% of their earnings in the form of a dividend.

Analyst Recommendations

This is a summary of current recommendations for DT Midstream and its peers, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
DT Midstream	1	3	5	0	2.44
DT Midstream Competitors	479	2398	2962	142	2.46

DT Midstream presently has a consensus target price of $56.86, indicating a potential upside of 2.24%. As a group, “Natural gas transmission” companies have a potential upside of 8.13%. Given DT Midstream’s peers stronger consensus rating and higher possible upside, analysts clearly believe DT Midstream has less favorable growth aspects than its peers.

Profitability

This table compares DT Midstream and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
DT Midstream	36.13%	8.28%	4.09%
DT Midstream Competitors	13.71%	8.63%	3.92%

Institutional and Insider Ownership

76.7% of DT Midstream shares are held by institutional investors. Comparatively, 47.4% of shares of all “Natural gas transmission” companies are held by institutional investors. 6.2% of shares of all “Natural gas transmission” companies are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares DT Midstream and its peers top-line revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
DT Midstream	$840.00 million	$307.00 million	17.38
DT Midstream Competitors	$7.25 billion	$612.05 million	23.83

DT Midstream’s peers have higher revenue and earnings than DT Midstream. DT Midstream is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Summary

DT Midstream peers beat DT Midstream on 9 of the 14 factors compared.

About DT Midstream (Get Rating)

DT Midstream, Inc. provides integrated natural gas services in the United States. The company operates through two segments, Pipeline and Gathering. It develops, owns, and operates an integrated portfolio of interstate pipelines, intrastate pipelines, storage systems, lateral pipelines, gathering systems, related treatment plants, and compression and surface facilities. The company engages in the transportation and storage of natural gas for intermediate and end user customers; and collecting natural gas from points at or near customers' wells for delivery to plants for processing, to gathering pipelines for gathering, or to pipelines for transportation, as well as offers compression, dehydration, gas treatment, water impoundment, water storage, water transportation, and sand mining services. It serves natural gas producers, local distribution companies, electric power generators, industrials, and national marketers. The company was incorporated in 2021 and is headquartered in Detroit, Michigan.