W&T Offshore (NYSE:WTI) versus Cheniere Energy (NYSE:LNG) Critical Survey

Cheniere Energy (NYSE:LNG) and W&T Offshore (NYSE:WTI) are both energy companies, but which is the superior stock? We will contrast the two businesses based on the strength of their profitability, institutional ownership, earnings, risk, valuation, analyst recommendations and dividends.

Institutional & Insider Ownership

87.3% of Cheniere Energy shares are owned by institutional investors. Comparatively, 42.9% of W&T Offshore shares are owned by institutional investors. 0.6% of Cheniere Energy shares are owned by company insiders. Comparatively, 35.9% of W&T Offshore shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

Cheniere Energy pays an annual dividend of $2.22 per share and has a dividend yield of 0.8%. W&T Offshore pays an annual dividend of $0.04 per share and has a dividend yield of 1.4%. Cheniere Energy pays out 15.5% of its earnings in the form of a dividend. W&T Offshore pays out -11.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. W&T Offshore is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a summary of current ratings and recommmendations for Cheniere Energy and W&T Offshore, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cheniere Energy	0	1	16	2	3.05
W&T Offshore	1	0	1	1	2.67

Cheniere Energy presently has a consensus target price of $324.41, suggesting a potential upside of 12.25%. W&T Offshore has a consensus target price of $4.25, suggesting a potential upside of 49.91%. Given W&T Offshore’s higher probable upside, analysts plainly believe W&T Offshore is more favorable than Cheniere Energy.

Earnings & Valuation

This table compares Cheniere Energy and W&T Offshore”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cheniere Energy	$19.98 billion	2.95	$5.33 billion	$14.33	20.17
W&T Offshore	$501.46 million	0.88	-$150.06 million	($0.34)	-8.34

Cheniere Energy has higher revenue and earnings than W&T Offshore. W&T Offshore is trading at a lower price-to-earnings ratio than Cheniere Energy, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Cheniere Energy and W&T Offshore’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cheniere Energy	13.08%	26.73%	6.29%
W&T Offshore	-8.44%	N/A	-1.72%

Risk & Volatility

Cheniere Energy has a beta of 0.01, indicating that its share price is 99% less volatile than the S&P 500. Comparatively, W&T Offshore has a beta of 0.3, indicating that its share price is 70% less volatile than the S&P 500.

Summary

Cheniere Energy beats W&T Offshore on 12 of the 17 factors compared between the two stocks.

About Cheniere Energy

Cheniere Energy, Inc., an energy infrastructure company, primarily engages in the liquefied natural gas (LNG) related businesses in the United States. It owns and operates the Sabine Pass LNG terminal in Cameron Parish, Louisiana; and the Corpus Christi LNG terminal near Corpus Christi, Texas. The company also owns Creole Trail pipeline, a 94-mile natural gas supply pipeline that interconnects the Sabine Pass LNG Terminal with several interstate and intrastate pipelines; and operates Corpus Christi pipeline, a 21.5-mile natural gas supply pipeline that interconnects the Corpus Christi LNG terminal with various interstate and intrastate natural gas pipelines. It is also involved in the LNG and natural gas marketing business. The company was incorporated in 1983 and is headquartered in Houston, Texas.

About W&T Offshore

W&T Offshore, Inc. engages in the production, exploration, development, and acquisition of oil and natural gas properties. It focuses its operations in the Gulf of Mexico. The company was founded by Tracy W. Krohn in 1983 and is headquartered in Houston, TX.