Financial Review: Cheniere Energy Partners (NYSE:CQP) & Northwest Natural (NYSE:NWN)

Northwest Natural (NYSE:NWN) and Cheniere Energy Partners (NYSE:CQP) are both utilities companies, but which is the better investment? We will compare the two companies based on the strength of their valuation, profitability, institutional ownership, risk, earnings, dividends and analyst recommendations.

Institutional and Insider Ownership

75.1% of Northwest Natural shares are held by institutional investors. Comparatively, 46.5% of Cheniere Energy Partners shares are held by institutional investors. 0.8% of Northwest Natural shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Northwest Natural and Cheniere Energy Partners, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Northwest Natural	0	0	2	0	3.00
Cheniere Energy Partners	2	0	0	0	1.00

Northwest Natural currently has a consensus price target of $43.50, suggesting a potential upside of 11.00%. Cheniere Energy Partners has a consensus price target of $50.50, suggesting a potential downside of 11.08%. Given Northwest Natural’s stronger consensus rating and higher probable upside, equities analysts clearly believe Northwest Natural is more favorable than Cheniere Energy Partners.

Valuation and Earnings

This table compares Northwest Natural and Cheniere Energy Partners”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Northwest Natural	$1.14 billion	1.38	$93.87 million	$2.12	18.49
Cheniere Energy Partners	$8.93 billion	3.08	$4.25 billion	$4.63	12.27

Cheniere Energy Partners has higher revenue and earnings than Northwest Natural. Cheniere Energy Partners is trading at a lower price-to-earnings ratio than Northwest Natural, indicating that it is currently the more affordable of the two stocks.

Dividends

Northwest Natural pays an annual dividend of $1.96 per share and has a dividend yield of 5.0%. Cheniere Energy Partners pays an annual dividend of $3.10 per share and has a dividend yield of 5.5%. Northwest Natural pays out 92.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Cheniere Energy Partners pays out 67.0% of its earnings in the form of a dividend. Northwest Natural has raised its dividend for 70 consecutive years. Cheniere Energy Partners is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Northwest Natural and Cheniere Energy Partners’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Northwest Natural	6.90%	5.89%	1.61%
Cheniere Energy Partners	31.28%	-328.60%	13.93%

Risk & Volatility

Northwest Natural has a beta of 0.62, suggesting that its stock price is 38% less volatile than the S&P 500. Comparatively, Cheniere Energy Partners has a beta of 0.75, suggesting that its stock price is 25% less volatile than the S&P 500.

Summary

Cheniere Energy Partners beats Northwest Natural on 9 of the 17 factors compared between the two stocks.

About Northwest Natural

Northwest Natural Holding Company, through its subsidiary, Northwest Natural Gas Company, provides regulated natural gas distribution services to residential, commercial, and industrial customers in the United States. The company operates a mist gas storage facility contracted to other utilities, third-party marketers, and electric generators; offers natural gas asset management services; and operates an appliance retail center. It also engages in gas storage, water and wastewater, non-regulated renewable natural gas, and other investment businesses. In addition, the company provides natural gas service in Oregon and southwest Washington; and water and wastewater connections. Northwest Natural Holding Company was founded in 1859 and is headquartered in Portland, Oregon.

About Cheniere Energy Partners

Cheniere Energy Partners, L.P., through its subsidiaries, provides liquefied natural gas (LNG) to integrated energy companies, utilities, and energy trading companies worldwide. The company owns and operates natural gas liquefaction and export facility at the Sabine Pass LNG Terminal located in Cameron Parish, Louisiana. It also owns a natural gas supply pipeline that interconnects the Sabine Pass LNG terminal with various interstate pipelines. The company was founded in 2003 and is headquartered in Houston, Texas. Cheniere Energy Partners, L.P. is a subsidiary of Cheniere Energy, Inc.