Financial Survey: Williams Companies (NYSE:WMB) and Granite Ridge Resources (NYSE:GRNT)

Granite Ridge Resources (NYSE:GRNT) and Williams Companies (NYSE:WMB) are both energy companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, profitability, risk, earnings and valuation.

Volatility & Risk

Granite Ridge Resources has a beta of 0.24, indicating that its stock price is 76% less volatile than the S&P 500. Comparatively, Williams Companies has a beta of 0.64, indicating that its stock price is 36% less volatile than the S&P 500.

Institutional & Insider Ownership

31.6% of Granite Ridge Resources shares are held by institutional investors. Comparatively, 86.4% of Williams Companies shares are held by institutional investors. 8.6% of Granite Ridge Resources shares are held by insiders. Comparatively, 0.5% of Williams Companies shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Granite Ridge Resources and Williams Companies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Granite Ridge Resources	-5.56%	4.67%	2.33%
Williams Companies	25.17%	18.49%	4.75%

Valuation and Earnings

This table compares Granite Ridge Resources and Williams Companies”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Granite Ridge Resources	$450.31 million	1.49	$24.35 million	($0.21)	-24.17
Williams Companies	$11.95 billion	7.63	$2.62 billion	$2.51	29.70

Williams Companies has higher revenue and earnings than Granite Ridge Resources. Granite Ridge Resources is trading at a lower price-to-earnings ratio than Williams Companies, indicating that it is currently the more affordable of the two stocks.

Dividends

Granite Ridge Resources pays an annual dividend of $0.44 per share and has a dividend yield of 8.7%. Williams Companies pays an annual dividend of $2.10 per share and has a dividend yield of 2.8%. Granite Ridge Resources pays out -209.5% of its earnings in the form of a dividend. Williams Companies 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. Williams Companies has raised its dividend for 9 consecutive years. Granite Ridge Resources is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of recent ratings for Granite Ridge Resources and Williams Companies, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Granite Ridge Resources	1	1	2	1	2.60
Williams Companies	0	1	18	3	3.09

Granite Ridge Resources presently has a consensus target price of $10.00, suggesting a potential upside of 97.04%. Williams Companies has a consensus target price of $86.35, suggesting a potential upside of 15.85%. Given Granite Ridge Resources’ higher possible upside, analysts clearly believe Granite Ridge Resources is more favorable than Williams Companies.

Summary

Williams Companies beats Granite Ridge Resources on 14 of the 18 factors compared between the two stocks.

About Granite Ridge Resources

Granite Ridge Resources, Inc. operates as a non-operated oil and gas exploration and production company. It owns a portfolio of wells and acreage across the Permian and other unconventional basins in the United States. Granite Ridge Resources, Inc. is based in Dallas, Texas.

About Williams Companies

The Williams Companies, Inc., together with its subsidiaries, operates as an energy infrastructure company primarily in the United States. It operates through Transmission & Gulf of Mexico, Northeast G&P, West, and Gas & NGL Marketing Services segments. The Transmission & Gulf of Mexico segment comprises natural gas pipelines; Transco, Northwest pipeline, MountainWest, and related natural gas storage facilities; and natural gas gathering and processing, and crude oil production handling and transportation assets in the Gulf Coast region. The Northeast G&P segment engages in the midstream gathering, processing, and fractionation activities in the Marcellus Shale region primarily in Pennsylvania and New York, and the Utica Shale region of eastern Ohio. The West segment consists of gas gathering, processing, and treating operations in the Rocky Mountain region of Colorado and Wyoming, the Barnett Shale region of north-central Texas, the Eagle Ford Shale region of South Texas, the Haynesville Shale region of northwest Louisiana, the Mid-Continent region that includes the Anadarko and Permian basins, and the DJ Basin of Colorado; and operates natural gas liquid (NGL) fractionation and storage facilities in central Kansas near Conway. The Gas & NGL Marketing Services segment provides wholesale marketing, trading, storage, and transportation of natural gas for natural gas utilities, municipalities, power generators, and producers; asset management services; and transports and markets NGLs. The company owns and operates 33,000 miles of pipelines. The Williams Companies, Inc. was founded in 1908 and is headquartered in Tulsa, Oklahoma.