DT Midstream (NYSE:DTM) vs. KNOT Offshore Partners (NYSE:KNOP) Financial Review

KNOT Offshore Partners (NYSE:KNOP) and DT Midstream (NYSE:DTM) are both energy companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, profitability, analyst recommendations, valuation, institutional ownership, risk and dividends.

Volatility and Risk

KNOT Offshore Partners has a beta of -0.05, indicating that its stock price is 105% less volatile than the S&P 500. Comparatively, DT Midstream has a beta of 0.7, indicating that its stock price is 30% less volatile than the S&P 500.

Profitability

This table compares KNOT Offshore Partners and DT Midstream’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
KNOT Offshore Partners	3.90%	5.73%	1.84%
DT Midstream	35.72%	9.58%	4.62%

Dividends

KNOT Offshore Partners pays an annual dividend of $0.30 per share and has a dividend yield of 2.7%. DT Midstream pays an annual dividend of $3.52 per share and has a dividend yield of 2.8%. KNOT Offshore Partners pays out 68.2% of its earnings in the form of a dividend. DT Midstream pays out 77.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. DT Midstream has increased its dividend for 2 consecutive years. DT Midstream is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

26.8% of KNOT Offshore Partners shares are owned by institutional investors. Comparatively, 81.5% of DT Midstream shares are owned by institutional investors. 0.5% of DT Midstream shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for KNOT Offshore Partners and DT Midstream, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
KNOT Offshore Partners	0	3	1	1	2.60
DT Midstream	1	4	10	0	2.60

KNOT Offshore Partners currently has a consensus target price of $14.00, indicating a potential upside of 24.61%. DT Midstream has a consensus target price of $152.14, indicating a potential upside of 21.76%. Given KNOT Offshore Partners’ higher probable upside, analysts plainly believe KNOT Offshore Partners is more favorable than DT Midstream.

Earnings and Valuation

This table compares KNOT Offshore Partners and DT Midstream”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
KNOT Offshore Partners	$364.44 million	1.04	$22.96 million	$0.44	25.53
DT Midstream	$1.24 billion	10.25	$441.00 million	$4.57	27.34

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

Summary

DT Midstream beats KNOT Offshore Partners on 14 of the 17 factors compared between the two stocks.

About KNOT Offshore Partners

KNOT Offshore Partners LP acquires, owns, and operates shuttle tankers under long-term charters in the North Sea and Brazil. The company provides loading, transportation, and discharge of crude oil under time charters and bareboat charters. The company was founded in 2013 and is headquartered in Aberdeen, the United Kingdom.

About DT Midstream

DT Midstream, Inc., together with its subsidiaries, provides integrated natural gas services in the United States. The company operates through two segments, Pipeline and Gathering. The Pipeline segment owns and operates interstate and intrastate natural gas pipelines, storage systems, and natural gas gathering lateral pipelines. This segment also engages in the transportation and storage of natural gas for intermediate and end-user customers. The Gathering segment owns and operates gas gathering systems. This segment is involved in the collection of natural gas for delivery to plants for treating, to gathering pipelines for further gathering, or to pipelines for transportation; and provision of associated ancillary services, including compression, dehydration, gas treatment, water impoundment, water transportation, water disposal, and sand mining. 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.