Energy Transfer (NYSEAMERICAN:ET – Get Free Report) and W&T Offshore (NYSE:WTI – Get Free Report) are both energy companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, institutional ownership, analyst recommendations, risk, valuation, earnings and dividends.
Risk and Volatility
Energy Transfer has a beta of 0.6, suggesting that its stock price is 40% less volatile than the S&P 500. Comparatively, W&T Offshore has a beta of 0.35, suggesting that its stock price is 65% less volatile than the S&P 500.
Earnings and Valuation
This table compares Energy Transfer and W&T Offshore”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Energy Transfer | $85.54 billion | 0.82 | $4.18 billion | $1.47 | 13.78 |
| W&T Offshore | $501.46 million | 1.10 | -$150.06 million | ($0.73) | -5.01 |
Energy Transfer has higher revenue and earnings than W&T Offshore. W&T Offshore is trading at a lower price-to-earnings ratio than Energy Transfer, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Energy Transfer and W&T Offshore’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Energy Transfer | 4.87% | 11.55% | 3.69% |
| W&T Offshore | -19.32% | N/A | -2.59% |
Institutional & Insider Ownership
38.2% of Energy Transfer shares are held by institutional investors. Comparatively, 42.9% of W&T Offshore shares are held by institutional investors. 3.3% of Energy Transfer 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 endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Analyst Ratings
This is a breakdown of current ratings and recommmendations for Energy Transfer and W&T Offshore, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Energy Transfer | 0 | 3 | 12 | 2 | 2.94 |
| W&T Offshore | 1 | 1 | 1 | 0 | 2.00 |
Energy Transfer presently has a consensus target price of $24.60, indicating a potential upside of 21.48%. W&T Offshore has a consensus target price of $4.25, indicating a potential upside of 16.28%. Given Energy Transfer’s stronger consensus rating and higher probable upside, analysts clearly believe Energy Transfer is more favorable than W&T Offshore.
Dividends
Energy Transfer pays an annual dividend of $1.36 per share and has a dividend yield of 6.7%. W&T Offshore pays an annual dividend of $0.04 per share and has a dividend yield of 1.1%. Energy Transfer pays out 92.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. W&T Offshore pays out -5.5% of its earnings in the form of a dividend. Energy Transfer has raised its dividend for 4 consecutive years. Energy Transfer is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Summary
Energy Transfer beats W&T Offshore on 14 of the 18 factors compared between the two stocks.
About Energy Transfer
Energy Transfer LP provides energy-related services. The company owns and operates natural gas transportation pipeline, and natural gas storage facilities in Texas and Oklahoma; and approximately 20,090 miles of interstate natural gas pipeline. It also sells natural gas to electric utilities, independent power plants, local distribution and other marketing companies, and industrial end-users. In addition, the company owns and operates natural gas gathering pipelines, processing plant, and treating and conditioning facilities in Texas, New Mexico, West Virginia, Pennsylvania, Ohio, Oklahoma, Arkansas, Kansas, Montana, North Dakota, Wyoming, and Louisiana; natural gas gathering, oil pipeline, and oil stabilization facilities in South Texas; and transports and supplies water to natural gas producer in Pennsylvania. Further, it owns 5,700 miles of natural gas liquid (NGL) pipeline; NGL fractionation facilities; NGL storage facilities; and other NGL storage assets and terminal. Additionally, the company provides crude oil transportation, terminalling, acquisition, and marketing activities; owns and operates approximately 14,500 miles of crude oil trunk and gathering pipelines in the Southwest, Midcontinent, and Midwest United States; and sells and distributes gasoline, middle distillate, and motor fuels and other petroleum products. It also offers natural gas compression services; carbon dioxide and hydrogen sulfide removal services; and manages coal and natural resources properties, as well as sells standing timber, leases coal-related infrastructure facilities, collects oil and gas royalty, and generate electrical power. The company was formerly known as Energy Transfer Equity, L.P. and changed its name to Energy Transfer LP in October 2018. Energy Transfer LP was founded in 1996 and is headquartered in Dallas, Texas.
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.
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