Teekay Tankers (NYSE: TNK) and Williams Companies (NYSE:WMB) are both energy companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, analyst recommendations, earnings, institutional ownership, profitability, risk and dividends.
Teekay Tankers pays an annual dividend of $0.12 per share and has a dividend yield of 9.9%. Williams Companies pays an annual dividend of $1.36 per share and has a dividend yield of 4.8%. Teekay Tankers pays out -36.4% of its earnings in the form of a dividend. Williams Companies pays out 469.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Teekay Tankers is clearly the better dividend stock, given its higher yield and lower payout ratio.
Risk and Volatility
Teekay Tankers has a beta of 2.17, meaning that its share price is 117% more volatile than the S&P 500. Comparatively, Williams Companies has a beta of 1.38, meaning that its share price is 38% more volatile than the S&P 500.
This is a breakdown of recent ratings and price targets for Teekay Tankers and Williams Companies, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Teekay Tankers presently has a consensus target price of $1.87, indicating a potential upside of 54.27%. Williams Companies has a consensus target price of $35.22, indicating a potential upside of 25.17%. Given Teekay Tankers’ higher possible upside, research analysts plainly believe Teekay Tankers is more favorable than Williams Companies.
Earnings & Valuation
This table compares Teekay Tankers and Williams Companies’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Teekay Tankers||$431.18 million||0.50||-$58.02 million||($0.33)||-3.67|
|Williams Companies||$8.03 billion||2.90||$2.17 billion||$0.29||97.03|
Williams Companies has higher revenue and earnings than Teekay Tankers. Teekay Tankers is trading at a lower price-to-earnings ratio than Williams Companies, indicating that it is currently the more affordable of the two stocks.
This table compares Teekay Tankers and Williams Companies’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Institutional & Insider Ownership
47.6% of Teekay Tankers shares are owned by institutional investors. Comparatively, 86.5% of Williams Companies shares are owned by institutional investors. 0.5% of Williams Companies shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Williams Companies beats Teekay Tankers on 12 of the 16 factors compared between the two stocks.
About Teekay Tankers
Teekay Tankers Ltd. is an international provider of marine transportation to the oil industries. The Company’s business is to own crude oil and product tankers. The Company has two segments: conventional tanker and ship-to-ship transfer. Its conventional tanker segment consists of the operation of all of its tankers, including those employed on full service lightering contracts. Its ship-to-ship transfer segment consists of its lightering support services, including those provided to the Company’s conventional tanker segment as part of full service lightering operations and other related services. Its operations are managed by Teekay Tankers Management Services Ltd., which provides the Company with commercial, technical, administrative and strategic services. Its fleet consists of approximately 60 conventional vessels (including over 10 in-chartered vessels and an approximately 50%-owned very large crude carrier (VLCC)) and approximately six ship-to-ship (STS) support vessels.
About Williams Companies
The Williams Companies, Inc. is an energy infrastructure company. The Company is focused on connecting North America’s hydrocarbon resource plays to markets for natural gas, natural gas liquids (NGL), and olefins. As of December 31, 2016, its interstate gas pipelines, midstream and olefins production interests were held through its investment in Williams Partners L.P. (WPZ). The Company’s segments include Williams Partners, Williams NGL & Petchem Services and Other. The Williams Partners segment includes its consolidated master limited partnership, WPZ. The gas pipeline business includes interstate natural gas pipelines and pipeline joint project investments. The midstream business provides natural gas gathering, treating, processing and compression services. The Williams NGL & Petchem Services segment includes its Texas Belle pipeline and certain other domestic olefins pipeline assets. Other segment includes its corporate operations and Canadian construction services company.
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