Head-To-Head Contrast: Tallgrass Energy (TGE) vs. Williams Partners (WPZ)

Tallgrass Energy (NYSE:TGE) and Williams Partners (NYSE:WPZ) are both oils/energy companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, earnings, risk, profitability, analyst recommendations, dividends and valuation.

Risk and Volatility

Tallgrass Energy has a beta of 1.91, suggesting that its share price is 91% more volatile than the S&P 500. Comparatively, Williams Partners has a beta of 1.65, suggesting that its share price is 65% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Tallgrass Energy and Williams Partners, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Tallgrass Energy 0 3 4 0 2.57
Williams Partners 0 5 9 0 2.64

Tallgrass Energy currently has a consensus price target of $26.83, suggesting a potential upside of 12.04%. Williams Partners has a consensus price target of $44.51, suggesting a potential downside of 6.05%. Given Tallgrass Energy’s higher possible upside, research analysts plainly believe Tallgrass Energy is more favorable than Williams Partners.

Dividends

Tallgrass Energy pays an annual dividend of $1.99 per share and has a dividend yield of 8.3%. Williams Partners pays an annual dividend of $2.52 per share and has a dividend yield of 5.3%. Tallgrass Energy pays out 261.8% 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 Partners pays out 152.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Earnings and Valuation

This table compares Tallgrass Energy and Williams Partners’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Tallgrass Energy $655.90 million 10.23 -$128.72 million $0.76 31.51
Williams Partners $8.01 billion 5.78 $871.00 million $1.65 28.71

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

Insider and Institutional Ownership

23.6% of Tallgrass Energy shares are owned by institutional investors. Comparatively, 22.3% of Williams Partners shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Tallgrass Energy and Williams Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Tallgrass Energy -18.21% 2.03% 0.87%
Williams Partners 8.49% 5.99% 3.08%

Summary

Williams Partners beats Tallgrass Energy on 9 of the 15 factors compared between the two stocks.

About Tallgrass Energy

Tallgrass Energy, LP, through its interests in Tallgrass Equity, LLC, provides crude oil transportation services to customers in Wyoming, Colorado, and the surrounding regions of the United States. The company operates through three segments: Natural Gas Transportation; Crude Oil Transportation; and Gathering, Processing & Terminalling. It also provides natural gas transportation and storage services for customers in the Rocky Mountain, Midwest, and Appalachian regions; natural gas and crude oil gathering and processing services for customers in Wyoming; and natural gas liquids (NGLs) transportation services in Northeast Colorado and Wyoming. In addition, the company offers water business services, including freshwater transportation, and produced water gathering and disposal in Colorado, Texas, and Wyoming; crude oil storage and terminalling services in Colorado; and marketing services for NGLs and crude oil. The company was formerly known as Tallgrass Energy GP, LP and changed its name to Tallgrass Energy, LP in June 2018. Tallgrass Energy, LP was founded in 2013 and is based in Leawood, Kansas.

About Williams Partners

Williams Partners L.P. operates as an energy infrastructure company. It operates through Northeast G&P, Atlantic-Gulf, and West segments. The Northeast G&P segment engages in natural gas gathering, compression, processing, and NGL fractionation businesses in the Marcellus and Utica shale regions in Pennsylvania, West Virginia, New York, and Ohio. The Atlantic-Gulf segment operates Transco interstate natural gas pipeline that extends from the Gulf of Mexico to the eastern seaboard; and natural gas gathering, processing and treating, crude oil production handling, and NGL fractionation assets within the onshore, offshore shelf, and deep-water areas in and around the Gulf Coast states of Texas, Louisiana, Mississippi, and Alabama. This segment also operates various petrochemical and feedstock pipelines in the Gulf Coast region. The West segment operates Northwest Pipeline, an interstate natural gas pipeline, as well as natural gas gathering, processing, and treating assets in Colorado, New Mexico, Wyoming, Louisiana, Texas, Arkansas, and Oklahoma. This segment also operates NGL and natural gas marketing business, and storage facilities. The company owns and operates 33,000 miles of pipelines system providing natural gas for clean-power generation, heating, and industrial use. WPZ GP LLC serves as the general partner of the company. The company was founded in 2005 and is based in Tulsa, Oklahoma. Williams Partners L.P. is a subsidiary of Williams Gas Pipeline Company, LLC.

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