Williams Companies (NYSE: WMB) and EnLink Midstream Partners (NYSE:ENLK) are both mid-cap oils/energy companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, risk, earnings, dividends, institutional ownership, valuation and profitability.
Volatility & Risk
Williams Companies has a beta of 1.37, meaning that its share price is 37% more volatile than the S&P 500. Comparatively, EnLink Midstream Partners has a beta of 2.08, meaning that its share price is 108% more volatile than the S&P 500.
This is a summary of recent recommendations for Williams Companies and EnLink Midstream Partners, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|EnLink Midstream Partners||0||6||4||0||2.40|
Williams Companies presently has a consensus target price of $33.73, suggesting a potential upside of 15.15%. EnLink Midstream Partners has a consensus target price of $18.29, suggesting a potential upside of 16.03%. Given EnLink Midstream Partners’ higher possible upside, analysts clearly believe EnLink Midstream Partners is more favorable than Williams Companies.
Valuation and Earnings
This table compares Williams Companies and EnLink Midstream Partners’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Williams Companies||$7.50 billion||3.23||-$424.00 million||$0.57||51.39|
|EnLink Midstream Partners||$4.25 billion||1.29||-$565.20 million||($0.23)||-68.52|
Williams Companies has higher revenue and earnings than EnLink Midstream Partners. EnLink Midstream Partners is trading at a lower price-to-earnings ratio than Williams Companies, indicating that it is currently the more affordable of the two stocks.
This table compares Williams Companies and EnLink Midstream Partners’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|EnLink Midstream Partners||0.76%||1.20%||0.53%|
Williams Companies pays an annual dividend of $1.20 per share and has a dividend yield of 4.1%. EnLink Midstream Partners pays an annual dividend of $1.56 per share and has a dividend yield of 9.9%. Williams Companies pays out 210.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. EnLink Midstream Partners pays out -678.2% of its earnings in the form of a dividend. Williams Companies has raised its dividend for 2 consecutive years. EnLink Midstream Partners is clearly the better dividend stock, given its higher yield and lower payout ratio.
Insider and Institutional Ownership
84.9% of Williams Companies shares are owned by institutional investors. Comparatively, 41.6% of EnLink Midstream Partners shares are owned by institutional investors. 0.5% of Williams Companies shares are owned by company insiders. Comparatively, 0.2% of EnLink Midstream Partners shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Williams Companies beats EnLink Midstream Partners on 13 of the 17 factors compared between the two stocks.
Williams Companies Company Profile
The Williams Companies, Inc. is an energy infrastructure company. The Company is focused on connecting North America’s hydrocarbon resource plays to markets for natural gas, natural gas liquids (NGL), and olefins. As of December 31, 2016, its interstate gas pipelines, midstream and olefins production interests were held through its investment in Williams Partners L.P. (WPZ). The Company’s segments include Williams Partners, Williams NGL & Petchem Services and Other. The Williams Partners segment includes its consolidated master limited partnership, WPZ. The gas pipeline business includes interstate natural gas pipelines and pipeline joint project investments. The midstream business provides natural gas gathering, treating, processing and compression services. The Williams NGL & Petchem Services segment includes its Texas Belle pipeline and certain other domestic olefins pipeline assets. Other segment includes its corporate operations and Canadian construction services company.
EnLink Midstream Partners Company Profile
EnLink Midstream Partners, LP is a midstream company. The Company’s business activities are conducted through its subsidiary, EnLink Midstream Operating, LP (the Operating Partnership) and the subsidiaries of the Operating Partnership. The Company operates through five segments: Texas, Oklahoma, Louisiana, Crude and Condensate, and Corporate. The Company focuses on providing midstream energy services, including gathering, processing, transmission, fractionation, storage, condensate stabilization, brine services and marketing to producers of natural gas, natural gas liquids (NGLs), crude oil and condensate. As of December 31, 2016, its midstream energy asset network included approximately 11,000 miles of pipelines, 20 natural gas processing plants, seven fractionators, barge and rail terminals, product storage facilities, purchasing and marketing capabilities, brine disposal wells, a crude oil trucking fleet, and equity investments in certain private midstream companies.
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