Critical Review: Genesis Energy (GEL) versus Williams Companies (WMB)
Genesis Energy (NYSE: GEL) and Williams Companies (NYSE:WMB) are both mid-cap oils/energy companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, earnings, dividends, profitability, risk, valuation and analyst recommendations.
Insider and Institutional Ownership
73.5% of Genesis Energy shares are held by institutional investors. Comparatively, 84.8% of Williams Companies shares are held by institutional investors. 0.7% of Genesis Energy 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 stock will outperform the market over the long term.
Genesis Energy pays an annual dividend of $2.00 per share and has a dividend yield of 8.8%. Williams Companies pays an annual dividend of $1.20 per share and has a dividend yield of 4.0%. Genesis Energy pays out 281.7% 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 pays out 210.5% 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 12 consecutive years.
Earnings and Valuation
This table compares Genesis Energy and Williams Companies’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Genesis Energy||$1.71 billion||1.62||$113.24 million||$0.71||31.83|
|Williams Companies||$7.50 billion||3.32||-$424.00 million||$0.57||52.88|
Genesis Energy has higher earnings, but lower revenue than Williams Companies. Genesis Energy is trading at a lower price-to-earnings ratio than Williams Companies, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Genesis Energy has a beta of 1.15, indicating that its share price is 15% more volatile than the S&P 500. Comparatively, Williams Companies has a beta of 1.37, indicating that its share price is 37% more volatile than the S&P 500.
This is a breakdown of current recommendations for Genesis Energy and Williams Companies, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Genesis Energy presently has a consensus price target of $33.13, suggesting a potential upside of 46.57%. Williams Companies has a consensus price target of $33.73, suggesting a potential upside of 11.90%. Given Genesis Energy’s higher possible upside, equities research analysts plainly believe Genesis Energy is more favorable than Williams Companies.
This table compares Genesis Energy and Williams Companies’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Williams Companies beats Genesis Energy on 11 of the 18 factors compared between the two stocks.
Genesis Energy Company Profile
Genesis Energy L.P. is a limited partnership focused on the midstream segment of the oil and gas industry. The Company operates through four segments: Offshore Pipeline Transportation, Refinery Services, Marine Transportation, and Supply and Logistics. The Offshore Pipeline Transportation segment is engaged in the offshore transportation of crude oil and natural gas in the Gulf of Mexico. The Refinery Services segment is involved in the processing of high sulfur (or sour) gas streams as part of refining operations to remove the sulfur and selling the related by-product, sodium hydrosulfide (NaHS). The Marine Transportation segment provides waterborne transportation of petroleum products and crude oil throughout North America. The Supply and Logistics segment is engaged in terminaling, blending, storing, marketing, and transporting crude oil and petroleum products (fuel oil, asphalt and other heavy refined products) and carbon dioxide.
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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