W&T Offshore (NYSE:WTI) and Ultrapar Participacoes (NYSE:UGP) Financial Review

Ultrapar Participacoes (NYSE:UGP) and W&T Offshore (NYSE:WTI) are both energy companies, but which is the better business? We will compare the two companies based on the strength of their analyst recommendations, risk, institutional ownership, valuation, dividends, earnings and profitability.

Analyst Recommendations

This is a summary of recent ratings and target prices for Ultrapar Participacoes and W&T Offshore, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ultrapar Participacoes	0	5	3	1	2.56
W&T Offshore	1	0	1	1	2.67

Ultrapar Participacoes presently has a consensus target price of $6.54, suggesting a potential upside of 20.78%. W&T Offshore has a consensus target price of $4.25, suggesting a potential upside of 37.32%. Given W&T Offshore’s stronger consensus rating and higher possible upside, analysts clearly believe W&T Offshore is more favorable than Ultrapar Participacoes.

Institutional and Insider Ownership

3.6% of Ultrapar Participacoes shares are held by institutional investors. Comparatively, 42.9% of W&T Offshore shares are held by institutional investors. 1.8% of Ultrapar Participacoes shares are held by company insiders. Comparatively, 35.9% of W&T Offshore shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Ultrapar Participacoes and W&T Offshore’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ultrapar Participacoes	2.28%	18.84%	7.17%
W&T Offshore	-8.44%	N/A	-1.72%

Risk & Volatility

Ultrapar Participacoes has a beta of 0.85, indicating that its stock price is 15% less volatile than the S&P 500. Comparatively, W&T Offshore has a beta of 0.3, indicating that its stock price is 70% less volatile than the S&P 500.

Dividends

Ultrapar Participacoes pays an annual dividend of $0.31 per share and has a dividend yield of 5.7%. W&T Offshore pays an annual dividend of $0.04 per share and has a dividend yield of 1.3%. Ultrapar Participacoes pays out 50.8% of its earnings in the form of a dividend. W&T Offshore pays out -11.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Earnings and Valuation

This table compares Ultrapar Participacoes and W&T Offshore”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ultrapar Participacoes	$25.51 billion	0.24	$439.48 million	$0.61	8.88
W&T Offshore	$501.46 million	0.96	-$150.06 million	($0.34)	-9.10

Ultrapar Participacoes has higher revenue and earnings than W&T Offshore. W&T Offshore is trading at a lower price-to-earnings ratio than Ultrapar Participacoes, indicating that it is currently the more affordable of the two stocks.

Summary

Ultrapar Participacoes beats W&T Offshore on 10 of the 16 factors compared between the two stocks.

About Ultrapar Participacoes

Ultrapar Participações S.A., through its subsidiaries, operates in the energy and infrastructure business in Brazil. The company distributes liquefied petroleum gas to residential, commercial, and industrial consumers, in addition to renewable electricity and compressed natural gas. It also operates in the distribution and marketing of gasoline, ethanol, diesel, fuel oil, kerosene, natural gas for vehicles, and lubricants; and holds AmPm convenience stores and provides JetOil lubricant services. In addition, the company operates liquid bulk storage terminals. Further, it offers digital payments services, combining the abastece aí app and the loyalty program Km de Vantagens. It also exports its products and services to customers in Europe, Singapore, the United States, Canada, other Latin American countries, and internationally. The company was founded in 1937 and is headquartered in São Paulo, Brazil.

About W&T Offshore

W&T Offshore, Inc. engages in the production, exploration, development, and acquisition of oil and natural gas properties. It focuses its operations in the Gulf of Mexico. The company was founded by Tracy W. Krohn in 1983 and is headquartered in Houston, TX.