The Williams Companies (NYSE:WMB) and Cheniere Energy (NYSEAMERICAN:LNG) 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 valuation, risk, institutional ownership, dividends, earnings, analyst recommendations and profitability.
Earnings and Valuation
This table compares The Williams Companies and Cheniere Energy's top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| The Williams Companies | $8.20 billion | 3.38 | $850 million | $0.99 | 23.07 |
| Cheniere Energy | $9.73 billion | 1.75 | $648 million | ($0.57) | -118.23 |
The Williams Companies has higher earnings, but lower revenue than Cheniere Energy. Cheniere Energy 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 Recommendations
This is a breakdown of recent recommendations and price targets for The Williams Companies and Cheniere Energy, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| The Williams Companies | 0 | 2 | 12 | 1 | 2.93 |
| Cheniere Energy | 1 | 1 | 8 | 1 | 2.82 |
The Williams Companies presently has a consensus price target of $23.8571, suggesting a potential upside of 4.45%. Cheniere Energy has a consensus price target of $66.5455, suggesting a potential downside of 1.25%. Given The Williams Companies' stronger consensus rating and higher probable upside, equities research analysts plainly believe The Williams Companies is more favorable than Cheniere Energy.
Profitability
This table compares The Williams Companies and Cheniere Energy's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| The Williams Companies | 1.86% | 7.77% | 2.70% |
| Cheniere Energy | 10.94% | 19.31% | 1.42% |
Risk & Volatility
The Williams Companies has a beta of 1.72, meaning that its share price is 72% more volatile than the S&P 500. Comparatively, Cheniere Energy has a beta of 1.58, meaning that its share price is 58% more volatile than the S&P 500.
Institutional and Insider Ownership
83.6% of The Williams Companies shares are owned by institutional investors. Comparatively, 86.3% of Cheniere Energy shares are owned by institutional investors. 0.3% of The Williams Companies shares are owned by insiders. Comparatively, 0.8% of Cheniere Energy shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Summary
The Williams Companies beats Cheniere Energy on 9 of the 14 factors compared between the two stocks.
