Reviewing Sanchez Energy (OTCMKTS:SNEC) and Hess Midstream (NYSE:HESM)

Sanchez Energy (OTCMKTS:SNEC) and Hess Midstream (NYSE:HESM) are both oils/energy companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, earnings, institutional ownership, profitability, risk, dividends and analyst recommendations.

Volatility & Risk

Sanchez Energy has a beta of 1.71, suggesting that its share price is 71% more volatile than the S&P 500. Comparatively, Hess Midstream has a beta of 1.52, suggesting that its share price is 52% more volatile than the S&P 500.

Insider and Institutional Ownership

0.6% of Sanchez Energy shares are held by institutional investors. Comparatively, 92.4% of Hess Midstream shares are held by institutional investors. 11.1% of Sanchez Energy shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sanchez Energy	0	0	0	0	N/A
Hess Midstream	0	3	3	0	2.50

Hess Midstream has a consensus target price of $36.83, suggesting a potential downside of 2.13%.

Earnings & Valuation

This table compares Sanchez Energy and Hess Midstream’s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sanchez Energy	$1.06 billion	0.00	$85.21 million	N/A	N/A
Hess Midstream	$1.35 billion	6.30	$118.60 million	$2.21	17.19

Hess Midstream has higher revenue and earnings than Sanchez Energy.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Sanchez Energy	2.22%	-18.15%	3.09%
Hess Midstream	10.18%	35.08%	3.78%

Summary

Hess Midstream beats Sanchez Energy on 7 of the 9 factors compared between the two stocks.

About Sanchez Energy

Sanchez Energy Corporation, an independent exploration and production company, focuses on the acquisition and development of onshore unconventional oil and natural gas resources in the United States. It engages in the horizontal development of resources from the Eagle Ford Shale in South Texas. It also holds an undeveloped acreage position in the Tuscaloosa Marine Shale (TMS) in Mississippi and Louisiana. As of December 31, 2018, the company had assembled approximately 271,000 net acres in the Eagle Ford Shale; and owned approximately 34,000 net acres in the TMS. Sanchez Energy Corporation was founded in 2011 and is headquartered 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.