Analyzing Black Stone Minerals (NYSE:BSM) & Hess Midstream Partners (NYSE:HESM)

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

Dividends

Black Stone Minerals pays an annual dividend of $1.50 per share and has a dividend yield of 11.2%. Hess Midstream Partners pays an annual dividend of $2.84 per share and has a dividend yield of 7.3%. Black Stone Minerals pays out 163.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Hess Midstream Partners pays out 111.4% 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 Partners has increased its dividend for 8 consecutive years.

Volatility & Risk

Black Stone Minerals has a beta of 0.31, meaning that its share price is 69% less volatile than the S&P 500. Comparatively, Hess Midstream Partners has a beta of 0.63, meaning that its share price is 37% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations and price targets for Black Stone Minerals and Hess Midstream Partners, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Black Stone Minerals	0	3	0	0	2.00
Hess Midstream Partners	0	2	3	0	2.60

Black Stone Minerals currently has a consensus price target of $14.00, suggesting a potential upside of 4.67%. Hess Midstream Partners has a consensus price target of $42.80, suggesting a potential upside of 9.98%. Given Hess Midstream Partners’ stronger consensus rating and higher probable upside, analysts clearly believe Hess Midstream Partners is more favorable than Black Stone Minerals.

Insider and Institutional Ownership

14.5% of Black Stone Minerals shares are owned by institutional investors. Comparatively, 99.0% of Hess Midstream Partners shares are owned by institutional investors. 17.8% of Black Stone Minerals shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Black Stone Minerals and Hess Midstream Partners”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Black Stone Minerals	$433.70 million	6.51	$271.33 million	$0.92	14.54
Hess Midstream Partners	$1.50 billion	5.61	$223.10 million	$2.55	15.26

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

Profitability

This table compares Black Stone Minerals and Hess Midstream Partners’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Black Stone Minerals	55.74%	32.76%	22.26%
Hess Midstream Partners	16.43%	54.89%	6.02%

Summary

Hess Midstream Partners beats Black Stone Minerals on 11 of the 17 factors compared between the two stocks.

About Black Stone Minerals

Black Stone Minerals, L.P., together with its subsidiaries, owns and manages oil and natural gas mineral interests. It owns mineral interests in approximately 16.8 million gross acres, nonparticipating royalty interests in 1.8 million gross acres, and overriding royalty interests in 1.6 million gross acres located in 41 states in the United States. The company was founded in 1876 and is based in Houston, Texas.

About Hess Midstream Partners

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.