Williams Partners (NYSE: WPZ) and EP Energy (NYSE:EPE) are both energy companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, analyst recommendations, earnings, valuation, institutional ownership, dividends and profitability.
Williams Partners pays an annual dividend of $2.40 per share and has a dividend yield of 6.4%. EP Energy does not pay a dividend. Williams Partners pays out 266.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Williams Partners has a beta of 1.5, indicating that its stock price is 50% more volatile than the S&P 500. Comparatively, EP Energy has a beta of 3.96, indicating that its stock price is 296% more volatile than the S&P 500.
This is a breakdown of recent recommendations and price targets for Williams Partners and EP Energy, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Williams Partners presently has a consensus target price of $46.01, indicating a potential upside of 23.08%. EP Energy has a consensus target price of $3.05, indicating a potential upside of 75.29%. Given EP Energy’s higher possible upside, analysts clearly believe EP Energy is more favorable than Williams Partners.
Earnings & Valuation
This table compares Williams Partners and EP Energy’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Williams Partners||$8.01 billion||4.55||$871.00 million||$0.90||41.53|
|EP Energy||$1.07 billion||0.41||-$194.00 million||($0.79)||-2.20|
Williams Partners has higher revenue and earnings than EP Energy. EP Energy is trading at a lower price-to-earnings ratio than Williams Partners, indicating that it is currently the more affordable of the two stocks.
This table compares Williams Partners and EP Energy’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Institutional and Insider Ownership
22.1% of Williams Partners shares are owned by institutional investors. Comparatively, 68.8% of EP Energy shares are owned by institutional investors. 1.3% of EP Energy shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Williams Partners beats EP Energy on 11 of the 16 factors compared between the two stocks.
About Williams Partners
Williams Partners L.P. is an energy infrastructure company. The Company has operations across the natural gas value chain from gathering, processing, and interstate transportation of natural gas and natural gas liquids to petchem production of ethylene, propylene, and other olefins. It operates through its Northeast G&P, Atlantic-Gulf, West segment. Under the Northeast G&P segment, it owns and operates fractionation facilities at Moundsville, de-ethanization and condensate facilities at its Oak Grove processing plant. The Atlantic Gulf segment includes the Company’s interstate natural gas pipeline, Transcontinental Gas Pipe Line Company, LLC. The West segment includes its interstate natural gas pipeline, Northwest Pipeline, and natural gas gathering processing and treating operations.
About EP Energy
EP Energy Corporation (EP Energy) is an independent exploration and production company. The Company is engaged in the acquisition and development of unconventional onshore oil and natural gas properties in the United States. The Company operates through a base of producing assets. It is involved in the development of its drilling inventory located in three areas: the Eagle Ford Shale (South Texas), the Wolfcamp Shale (Permian Basin in West Texas) and the Altamont Field in the Uinta Basin (Northeastern Utah). As of December 31, 2016, in its operating areas, the Company had identified 5,156 drilling locations (including 639 drilling locations to which it has attributed proved undeveloped reserves). As of December 31, 2016, the Company had proved reserves of 432.4 million barrels of oil equivalent (MMBoe) and an average net daily production of 87,641 barrel of oil equivalent per day (Boe/d).
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