Comparing Kinder Morgan (KMI) & Williams Companies (WMB)

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Kinder Morgan (NYSE:KMI) and Williams Companies (NYSE:WMB) are both large-cap oils/energy companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, earnings, dividends, risk, institutional ownership, profitability and valuation.

Dividends

Kinder Morgan pays an annual dividend of $0.80 per share and has a dividend yield of 4.0%. Williams Companies pays an annual dividend of $1.52 per share and has a dividend yield of 5.5%. Kinder Morgan pays out 89.9% 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 Companies pays out 192.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Institutional & Insider Ownership

63.9% of Kinder Morgan shares are held by institutional investors. Comparatively, 89.3% of Williams Companies shares are held by institutional investors. 14.2% of Kinder Morgan shares are held by insiders. Comparatively, 0.5% of Williams Companies shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Risk and Volatility

Kinder Morgan has a beta of 0.96, indicating that its stock price is 4% less volatile than the S&P 500. Comparatively, Williams Companies has a beta of 1.72, indicating that its stock price is 72% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Kinder Morgan and Williams Companies, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kinder Morgan 1 0 17 1 2.95
Williams Companies 0 2 14 0 2.88

Kinder Morgan presently has a consensus target price of $20.78, indicating a potential upside of 4.59%. Williams Companies has a consensus target price of $32.21, indicating a potential upside of 16.89%. Given Williams Companies’ higher possible upside, analysts plainly believe Williams Companies is more favorable than Kinder Morgan.

Profitability

This table compares Kinder Morgan and Williams Companies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Kinder Morgan 11.38% 5.86% 2.59%
Williams Companies -1.78% 4.83% 1.67%

Earnings & Valuation

This table compares Kinder Morgan and Williams Companies’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Kinder Morgan $14.14 billion 3.10 $1.61 billion $0.89 22.33
Williams Companies $8.69 billion 3.84 -$155.00 million $0.79 34.89

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

Summary

Kinder Morgan beats Williams Companies on 11 of the 17 factors compared between the two stocks.

About Kinder Morgan

Kinder Morgan, Inc. operates as an energy infrastructure company in North America. The company operates through Natural Gas Pipelines, Products Pipelines, Terminals, and CO2 segments. The Natural Gas Pipelines segment owns and operates interstate and intrastate natural gas pipeline and storage systems; natural gas and crude oil gathering systems, and natural gas processing and treating facilities; natural gas liquids (NGL) fractionation facilities and transportation systems; and liquefied natural gas facilities. The Products Pipelines segment owns and operates refined petroleum products, NGL, and crude oil and condensate pipelines; and associated product terminals and petroleum pipeline transmix facilities. The Terminals segment owns and/or operates liquids and bulk terminals that transload and store refined petroleum products, crude oil, ethanol, and chemicals, as well as bulk products, including coke, metals, and ores; and owns tankers. The CO2 segment produces, transports, and markets CO2 to recovery and production crude oil from mature oil fields; and owns interests in/or operates oil fields and gas processing plants, as well as operates a crude oil pipeline system in West Texas. The company owns an interest in or operates approximately 84,000 miles of pipelines and 153 terminals. The company was formerly known as Kinder Morgan Holdco LLC and changed its name to Kinder Morgan, Inc. in February 2011. Kinder Morgan, Inc. was founded in 1936 and is headquartered in Houston, Texas.

About Williams Companies

The Williams Companies, Inc. operates as an energy infrastructure company primarily in the United States. It owns and operates natural gas pipeline system extending from Texas, Louisiana, Mississippi, and the Gulf of Mexico through Alabama, Georgia, South Carolina, North Carolina, Virginia, Maryland, Delaware, Pennsylvania, and New Jersey to the New York City metropolitan area. The company also owns and operates a natural gas pipeline system extending from the San Juan basin in northwestern New Mexico and southwestern Colorado through Colorado, Utah, Wyoming, Idaho, Oregon, and Washington to a point on the Canadian border near Sumas, Washington; gulfstream natural gas pipeline system extending from the Mobile Bay area in Alabama to markets in Florida; and constitution pipeline that would connect its gathering system in Susquehanna County, Pennsylvania to the Iroquois Gas Transmission and Tennessee Gas Pipeline systems in New York. In addition, it provides natural gas gathering, treating, processing, and compression services; natural gas liquids production, fractionation, storage, marketing, and transportation services; and deepwater production handling and crude oil transportation services. The company transports and stores natural gas to local natural gas distribution companies, municipal utilities, direct industrial users, electric power generators, and natural gas marketers and producers. As of December 31, 2017, it owned and operated approximately 13,600 miles of pipelines. The Williams Companies, Inc. was founded in 1908 and is headquartered in Tulsa, Oklahoma.

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