Contrasting Hess Midstream (NYSE:HESM) and TotalEnergies (NYSE:TTE)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
TotalEnergies	8.10%	21.81%	8.74%
Hess Midstream	7.87%	22.28%	2.82%

Analyst Recommendations

This is a summary of current ratings and price targets for TotalEnergies and Hess Midstream, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TotalEnergies	0	6	3	0	2.33
Hess Midstream	0	2	4	0	2.67

TotalEnergies presently has a consensus price target of $59.33, indicating a potential downside of 11.88%. Hess Midstream has a consensus price target of $34.67, indicating a potential upside of 13.33%. Given Hess Midstream’s stronger consensus rating and higher possible upside, analysts clearly believe Hess Midstream is more favorable than TotalEnergies.

Valuation and Earnings

This table compares TotalEnergies and Hess Midstream’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TotalEnergies	$228.13 billion	0.72	$20.53 billion	$7.84	8.59
Hess Midstream	$1.28 billion	1.64	$620.60 million	$2.03	15.07

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

Volatility and Risk

TotalEnergies has a beta of 0.74, meaning that its stock price is 26% less volatile than the S&P 500. Comparatively, Hess Midstream has a beta of 1.6, meaning that its stock price is 60% more volatile than the S&P 500.

Dividends

TotalEnergies pays an annual dividend of $2.29 per share and has a dividend yield of 3.4%. Hess Midstream pays an annual dividend of $2.47 per share and has a dividend yield of 8.1%. TotalEnergies pays out 29.2% of its earnings in the form of a dividend. Hess Midstream pays out 121.7% 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 has increased its dividend for 6 consecutive years. Hess Midstream is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

6.5% of TotalEnergies shares are held by institutional investors. Comparatively, 86.3% of Hess Midstream shares are held by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

Hess Midstream beats TotalEnergies on 10 of the 16 factors compared between the two stocks.

About TotalEnergies

TotalEnergies SE, a multi-energy company, produces and markets fuels, natural gas, and electricity in France, rest of Europe, North America, Africa, and internationally. It operates through Integrated Gas, Renewables & Power; Exploration & Production; Refining & Chemicals; and Marketing & Services segments. The Integrated Gas, Renewables & Power segment engages in integrated gas, including liquified natural gas (LNG), and low carbon electricity businesses; and upstream and midstream LNG activities. Its Exploration & Production segment offers carbon storage and nature-based solutions. The Refining & Chemicals segment provides refining, petrochemicals, and specialty chemicals; and supply and trading of oil, and marine shipping services. Its Marketing & Services segment engages in the supply and marketing of petroleum products. TotalEnergies SE was formerly known as TOTAL SE and changed its name to TotalEnergies SE in June 2021. The company was founded in 1924 and is headquartered in Courbevoie, France.

About Hess Midstream

Hess Midstream LP owns, develops, operates, and acquires midstream assets. The company 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 1,380 miles of high and low pressure natural gas and natural gas liquids gathering pipelines with capacity of approximately 590 million cubic feet per day; crude oil gathering system comprises approximately 560 miles of crude oil gathering pipelines; and produced water gathering system that includes approximately 290 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; and crude oil rail cars, 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.