Analyzing Williams Partners (WPZ) and Viper Energy Partners (VNOM)
Viper Energy Partners (NASDAQ: VNOM) and Williams Partners (NYSE:WPZ) are both mid-cap oils/energy companies, but which is the better business? We will compare the two companies based on the strength of their profitability, risk, institutional ownership, earnings, valuation, dividends and analyst recommendations.
This table compares Viper Energy Partners and Williams Partners’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Viper Energy Partners||60.87%||12.08%||11.11%|
Earnings & Valuation
This table compares Viper Energy Partners and Williams Partners’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Viper Energy Partners||$118.19 million||18.88||$104.04 million||$0.88||22.27|
|Williams Partners||$8.00 billion||4.43||$3.78 billion||$1.67||22.18|
Williams Partners has higher revenue and earnings than Viper Energy Partners. Williams Partners is trading at a lower price-to-earnings ratio than Viper Energy Partners, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
15.6% of Viper Energy Partners 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 stock will outperform the market over the long term.
Viper Energy Partners pays an annual dividend of $1.33 per share and has a dividend yield of 6.8%. Williams Partners pays an annual dividend of $2.40 per share and has a dividend yield of 6.5%. Viper Energy Partners pays out 151.1% 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 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.
This is a breakdown of recent ratings and target prices for Viper Energy Partners and Williams Partners, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Viper Energy Partners||0||1||8||1||3.00|
Viper Energy Partners currently has a consensus price target of $21.89, indicating a potential upside of 11.68%. Williams Partners has a consensus price target of $44.85, indicating a potential upside of 21.07%. Given Williams Partners’ higher probable upside, analysts plainly believe Williams Partners is more favorable than Viper Energy Partners.
Risk & Volatility
Viper Energy Partners has a beta of 0.99, suggesting that its share price is 1% less volatile than the S&P 500. Comparatively, Williams Partners has a beta of 1.4, suggesting that its share price is 40% more volatile than the S&P 500.
Williams Partners beats Viper Energy Partners on 9 of the 15 factors compared between the two stocks.
About Viper Energy Partners
Viper Energy Partners LP is engaged in owning, acquiring and exploiting oil and natural gas properties in North America. The Company’s assets are located in the Permian Basin of West Texas. As of December 31, 2016, the Permian Basin consisted of approximately 85,000 square miles. As of December 31, 2016, its assets consisted of mineral interests underlying 107,568 gross acres in the Permian Basin. As of December 31, 2016, there were 545 vertical wells and 190 horizontal wells producing on this acreage. As of December 31, 2016, its estimated proved oil and natural gas reserves of its assets was 31,435 thousand barrels of crude oil equivalent (MBOE). As of December 31, 2016, the Company’s proved reserves were approximately 68% oil, 18% natural gas liquids and 14% natural gas. In addition to its mineral interests, the Company owns a minor equity interest in an entity that owns mineral, overriding royalty, net profits, leasehold and other similar interests.
About Williams Partners
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.
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