Equitrans Midstream Corporation (ETRN) and Waitr Holdings Inc. (WTRH) both have caught the attention of the investment community that recently hit new low. This price action has ruffled more than a few feathers in the investment community, but is one a better investment than the other? To answer this, we will compare the two companies across growth, profitability, risk, return, dividends, and valuation measures.
The company has grown sales at a 27.20% annual rate over the past five years, putting it in the medium growth category. ETRN has a net profit margin of -12.50% and is less profitable than the average company in the Oil & Gas Midstream industry. In terms of efficiency, ETRN has an asset turnover ratio of 0.14. This figure represents the amount of revenue a company generates per dollar of assets. ETRN’s financial leverage ratio is 2.15, which indicates that the company’s asset base is primarily funded by debt. Company’s return on equity, which is really just the product of the company’s profit margin, asset turnover, and financial leverage ratios, is -18.10%, which is worse than the Oil & Gas Midstream industry average ROE.
Equitrans Midstream Corporation (ETRN) pays out an annual dividend of 0.60 per share. At the current valuation, this equates to a dividend yield of 7.44%. Stock’s free cash flow yield, which represents the amount of cash available to investors before dividends, expressed as a percentage of the stock price, is -2.48 All else equal, companies with higher FCF yields are viewed as cheaper. The average investment recommendation for ETRN, taken from a group of Wall Street Analysts, is 2.10, or a Moderate Sell.
Over the past six months, Equitrans Midstream Corporation insiders have been net sellers, acquiring a net of 356470.0 shares. This implies that insiders have been feeling relatively bullish about the outlook for ETRN. Insider activity and sentiment signals are important to monitor because they can shed light on how “risky” a stock is perceived to be at it’s current valuation. Knowing this, it makes sense to look at beta, a measure of market risk.
Waitr Holdings Inc. (NASDAQ:WTRH) operates in the Software – Application segment of the Technology sector. WTRH’s asset turnover ratio is 0.64 and the company has financial leverage of 6.81. Company is therefore mostly financed by debt. WTRH’s return on equity of -206.40% is worse than the Software – Application industry average.
The company trades at a free cash flow yield of -17.9. The average analyst recommendation for WTRH is 1.70, or a Strong Sell.
Waitr Holdings Inc. insiders have bought a net of 110155.0 shares during the past three months, which implies that the company’s top executives have been feeling bullish about the stock’s outlook. Finally, WTRH’s beta of -3.57 indicates that the stock has an below average level of market risk.
Equitrans Midstream Corporation (NYSE:ETRN) scores higher than Waitr Holdings Inc. (NASDAQ:WTRH) on 4 of the 6 measures compared between the two companies. ETRN has the better fundamentals, scoring higher on profitability, efficiency metrics. ETRN has better insider activity and sentiment signals.