Enterprise Products Partners (NYSE:EPD) and The Williams Companies (NYSE:WMB) are both large-cap oils/energy companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, valuation, analyst recommendations, dividends, risk, institutional ownership and earnings.
Profitability
This table compares Enterprise Products Partners and The Williams Companies' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Enterprise Products Partners | 16.10% | 17.76% | 7.40% |
| The Williams Companies | 1.86% | 7.77% | 2.70% |
Earnings & Valuation
This table compares Enterprise Products Partners and The Williams Companies' gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Enterprise Products Partners | $32.79 billion | 1.52 | $4.59 billion | $2.15 | 10.63 |
| The Williams Companies | $8.20 billion | 3.47 | $850 million | $0.99 | 23.69 |
Enterprise Products Partners has higher revenue and earnings than The Williams Companies. Enterprise Products Partners is trading at a lower price-to-earnings ratio than The Williams Companies, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a breakdown of current recommendations and price targets for Enterprise Products Partners and The Williams Companies, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Enterprise Products Partners | 0 | 0 | 14 | 0 | 3.00 |
| The Williams Companies | 0 | 2 | 9 | 1 | 2.92 |
Enterprise Products Partners currently has a consensus target price of $25.7692, indicating a potential upside of 12.73%. The Williams Companies has a consensus target price of $25.00, indicating a potential upside of 6.61%. Given Enterprise Products Partners' stronger consensus rating and higher possible upside, research analysts plainly believe Enterprise Products Partners is more favorable than The Williams Companies.
Risk and Volatility
Enterprise Products Partners has a beta of 1.38, meaning that its stock price is 38% more volatile than the S&P 500. Comparatively, The Williams Companies has a beta of 1.72, meaning that its stock price is 72% more volatile than the S&P 500.
Dividends
Enterprise Products Partners pays an annual dividend of $1.80 per share and has a dividend yield of 7.9%. The Williams Companies pays an annual dividend of $1.64 per share and has a dividend yield of 7.0%. Enterprise Products Partners pays out 83.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. The Williams Companies pays out 165.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Enterprise Products Partners has increased its dividend for 1 consecutive years and The Williams Companies has increased its dividend for 1 consecutive years. Enterprise Products Partners is clearly the better dividend stock, given its higher yield and lower payout ratio.
Institutional & Insider Ownership
30.5% of Enterprise Products Partners shares are owned by institutional investors. Comparatively, 83.6% of The Williams Companies shares are owned by institutional investors. 37.5% of Enterprise Products Partners shares are owned by company insiders. Comparatively, 0.3% of The Williams Companies shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Summary
Enterprise Products Partners beats The Williams Companies on 12 of the 17 factors compared between the two stocks.
