Enbridge Energy Partners (NYSE: EEP) and Williams Companies (NYSE:WMB) are both oils/energy companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, earnings, analyst recommendations, risk and valuation.
Earnings & Valuation
This table compares Enbridge Energy Partners and Williams Companies’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Enbridge Energy Partners||$2.43 billion||1.74||$282.00 million||$0.63||20.54|
|Williams Companies||$8.03 billion||2.96||$2.17 billion||$0.29||99.10|
This is a breakdown of current ratings and recommmendations for Enbridge Energy Partners and Williams Companies, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Enbridge Energy Partners||2||7||1||0||1.90|
Enbridge Energy Partners presently has a consensus target price of $17.50, indicating a potential upside of 35.24%. Williams Companies has a consensus target price of $35.22, indicating a potential upside of 22.55%. Given Enbridge Energy Partners’ higher possible upside, analysts plainly believe Enbridge Energy Partners is more favorable than Williams Companies.
This table compares Enbridge Energy Partners and Williams Companies’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Enbridge Energy Partners||9.12%||5.68%||2.15%|
Risk and Volatility
Enbridge Energy Partners has a beta of 1.16, meaning that its stock price is 16% more volatile than the S&P 500. Comparatively, Williams Companies has a beta of 1.32, meaning that its stock price is 32% more volatile than the S&P 500.
Insider and Institutional Ownership
45.7% of Enbridge Energy Partners shares are owned by institutional investors. Comparatively, 85.8% of Williams Companies shares are owned by institutional investors. 0.5% of Williams Companies shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Enbridge Energy Partners pays an annual dividend of $1.40 per share and has a dividend yield of 10.8%. Williams Companies pays an annual dividend of $1.20 per share and has a dividend yield of 4.2%. Enbridge Energy Partners pays out 222.2% 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 Companies pays out 413.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Enbridge Energy Partners is clearly the better dividend stock, given its higher yield and lower payout ratio.
Williams Companies beats Enbridge Energy Partners on 11 of the 17 factors compared between the two stocks.
Enbridge Energy Partners Company Profile
Enbridge Energy Partners, L.P is a geographically and operationally diversified organization that provides crude oil and liquid petroleum gathering and transportation and storage services. The Company operates through the Liquids business segment. Its Liquids segment includes the operations of its Lakehead, North Dakota and mid-continent systems. The Company’s Lakehead system along with the Enbridge system formed the Mainline system, together formed the liquid petroleum pipeline system, as of December 31, 2016. The Mainline system serves refining centers in the Great Lakes and Midwest regions of the United States and the provinces of Ontario and Quebec, Canada. The Lakehead system is the United States portion of the Mainline system.
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.
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