EQT GP (NYSE: EQGP) and Cactus (NYSE:WHD) are both oils/energy companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, risk, profitability and dividends.
Earnings and Valuation
This table compares EQT GP and Cactus’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|EQT GP||$834.10 million||6.91||$261.99 million||$0.98||22.10|
EQT GP has higher revenue and earnings than Cactus.
EQT GP pays an annual dividend of $0.98 per share and has a dividend yield of 4.5%. Cactus does not pay a dividend. EQT GP pays out 100.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Cactus has raised its dividend for 2 consecutive years.
This is a summary of current recommendations and price targets for EQT GP and Cactus, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
EQT GP presently has a consensus target price of $31.30, suggesting a potential upside of 44.51%. Cactus has a consensus target price of $31.00, suggesting a potential upside of 14.43%. Given EQT GP’s higher possible upside, analysts clearly believe EQT GP is more favorable than Cactus.
Insider and Institutional Ownership
10.1% of EQT GP shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
This table compares EQT GP and Cactus’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
EQT GP beats Cactus on 7 of the 11 factors compared between the two stocks.
About EQT GP
EQT GP Holdings, LP (EQGP) is a limited partnership company and subsidiary of EQT Gathering Holdings, LLC (EQT Gathering Holdings). The Company was formed to own EQT Corporation’s (EQT’s) partnership interests in EQT Midstream Partners, LP (EQM), a limited partnership formed by EQT to own, operate, acquire and develop midstream assets in the Appalachian Basin. Its segments include Gathering, and Transmission. The Gathering segment primarily includes high pressure gathering lines and the Federal Energy Regulatory Commission (FERC)-regulated low pressure gathering system. The Transmission segment includes EQM’s FERC-regulated interstate pipeline and storage business. EQGP has no independent operations. It has partnership interests in EQM. As of December 31, 2016, EQM provided midstream services to EQT and various third parties across 24 counties in Pennsylvania, West Virginia and Ohio through its two primary assets: the gathering system, and the transmission and storage system.
Cactus, Inc. is focused on designing, manufacturing, selling and renting a wellheads and pressure control equipment. Its principal products, include Cactus SafeDrill wellhead systems, frac stacks, zipper manifolds and production trees. The Cactus SafeDrill wellhead systems employ technology traditionally associated with deepwater applications, which allows technicians to land and secure casing strings safely from the rig floor without the need to descend into the well cellar. The Company’s products are sold and rented principally for onshore unconventional oil and gas wells and are utilized during the drilling, completion (including fracturing) and production Phases of its customers’ wells.
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