Williams Partners (NYSE: WPZ) and Devon Energy Corporation (NYSE:DVN) are both large-cap oils/energy companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, institutional ownership, valuation, dividends, risk, analyst recommendations and earnings.
Institutional & Insider Ownership
22.8% of Williams Partners shares are held by institutional investors. Comparatively, 77.0% of Devon Energy Corporation shares are held by institutional investors. 0.5% of Devon Energy Corporation shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Volatility & Risk
Williams Partners has a beta of 1.4, indicating that its stock price is 40% more volatile than the S&P 500. Comparatively, Devon Energy Corporation has a beta of 2.21, indicating that its stock price is 121% more volatile than the S&P 500.
Valuation & Earnings
This table compares Williams Partners and Devon Energy Corporation’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Williams Partners||$8.00 billion||4.74||$3.78 billion||$1.67||23.74|
|Devon Energy Corporation||$12.07 billion||1.56||$3.49 billion||$4.39||8.15|
Williams Partners has higher revenue, but lower earnings than Devon Energy Corporation. Devon Energy Corporation is trading at a lower price-to-earnings ratio than Williams Partners, indicating that it is currently the more affordable of the two stocks.
Williams Partners pays an annual dividend of $2.40 per share and has a dividend yield of 6.1%. Devon Energy Corporation pays an annual dividend of $0.24 per share and has a dividend yield of 0.7%. Williams Partners pays out 143.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Devon Energy Corporation pays out 5.5% of its earnings in the form of a dividend.
This table compares Williams Partners and Devon Energy Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Devon Energy Corporation||16.07%||5.36%||2.17%|
This is a summary of current ratings and recommmendations for Williams Partners and Devon Energy Corporation, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Devon Energy Corporation||0||5||11||0||2.69|
Williams Partners presently has a consensus target price of $44.83, suggesting a potential upside of 13.10%. Devon Energy Corporation has a consensus target price of $45.25, suggesting a potential upside of 26.47%. Given Devon Energy Corporation’s higher possible upside, analysts clearly believe Devon Energy Corporation is more favorable than Williams Partners.
Devon Energy Corporation beats Williams Partners on 9 of the 17 factors compared between the two stocks.
Williams Partners Company Profile
Williams Partners L.P. is an energy infrastructure company. The Company has operations across the natural gas value chain from gathering, processing, and interstate transportation of natural gas and natural gas liquids to petchem production of ethylene, propylene, and other olefins. It operates through its Northeast G&P, Atlantic-Gulf, West segment. Under the Northeast G&P segment, it owns and operates fractionation facilities at Moundsville, de-ethanization and condensate facilities at its Oak Grove processing plant. The Atlantic Gulf segment includes the Company’s interstate natural gas pipeline, Transcontinental Gas Pipe Line Company, LLC. The West segment includes its interstate natural gas pipeline, Northwest Pipeline, and natural gas gathering processing and treating operations.
Devon Energy Corporation Company Profile
Devon Energy Corporation is an independent energy company. The Company also controls EnLink Midstream Partners, L.P. (EnLink). The Company’s segments include U.S., Canada and EnLink. The Company is engaged primarily in the exploration, development and production of oil, natural gas and natural gas liquids (NGLs). The Company’s operations are concentrated in various North American onshore areas in the United States and Canada. The Company’s U.S. and Canada segments are primarily engaged in oil and gas exploration and production activities. EnLink is a master limited partnership (MLP) with a midstream business and operations located across the United States. EnLink focuses on providing gathering, transmission, processing, storage, fractionation and marketing to upstream oil and natural gas producers. The Company’s properties include Barnett Shale, Delaware Basin, Eagle Ford, Heavy Oil, Rockies Oil and STACK.
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