Contrasting Williams Companies (NYSE:WMB) and Global Partners (NYSE:GLP)

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

Institutional & Insider Ownership

86.4% of Williams Companies shares are held by institutional investors. Comparatively, 38.1% of Global Partners shares are held by institutional investors. 0.5% of Williams Companies shares are held by company insiders. Comparatively, 41.5% of Global Partners shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Volatility & Risk

Williams Companies has a beta of 0.59, suggesting that its stock price is 41% less volatile than the S&P 500. Comparatively, Global Partners has a beta of 1.06, suggesting that its stock price is 6% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Williams Companies and Global Partners, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Williams Companies	0	2	15	3	3.05
Global Partners	0	2	1	0	2.33

Williams Companies presently has a consensus price target of $85.67, suggesting a potential upside of 18.81%. Global Partners has a consensus price target of $46.00, suggesting a potential downside of 6.84%. Given Williams Companies’ stronger consensus rating and higher probable upside, research analysts clearly believe Williams Companies is more favorable than Global Partners.

Valuation & Earnings

This table compares Williams Companies and Global Partners”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Williams Companies	$11.95 billion	7.38	$2.62 billion	$2.51	28.73
Global Partners	$18.56 billion	0.09	$79.22 million	$4.91	10.06

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

Profitability

This table compares Williams Companies and Global Partners’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Williams Companies	25.17%	18.49%	4.75%
Global Partners	0.91%	30.87%	4.92%

Dividends

Williams Companies pays an annual dividend of $2.10 per share and has a dividend yield of 2.9%. Global Partners pays an annual dividend of $3.12 per share and has a dividend yield of 6.3%. 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. Global Partners pays out 63.5% of its earnings in the form of a dividend. Williams Companies has increased its dividend for 9 consecutive years and Global Partners has increased its dividend for 5 consecutive years. Global Partners is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Williams Companies beats Global Partners on 10 of the 18 factors compared between the two stocks.

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.

About Global Partners

Global Partners LP engages in the purchasing, selling, gathering, blending, storing, and logistics of transporting gasoline and gasoline blendstocks, distillates, residual oil, renewable fuels, crude oil, and propane to wholesalers, retailers, and commercial customers. The company operates through three segments: Wholesale, Gasoline Distribution and Station Operations, and Commercial. The Wholesale segment sells home heating oil, branded and unbranded gasoline and gasoline blendstocks, diesel, kerosene, and residual oil to home heating oil and propane retailers and wholesale distributors. This segment also transports the products by railcars, barges, trucks and/or pipelines. Its Gasoline Distribution and Station Operations segment sells branded and unbranded gasoline to gasoline station operators and sub-jobbers; operates gasoline stations and convenience stores; and provides car wash, lottery, and ATM services, as well as leases gasoline stations. The Commercial segment sells and delivers unbranded gasoline, home heating oil, diesel, kerosene, residual oil, and bunker fuel to customers in the public sector, as well as to commercial and industrial end-users; and sells custom blended fuels. The company is also involved in the transportation of petroleum products and renewable fuels through rail from the mid-continent region of the United States and Canada. Global Partners LP was founded in 2005 and is based in Waltham, Massachusetts.