Head to Head Comparison: Western Gas Equity Partners, (NYSE:WGP) versus Phillips 66 (PSX)

Western Gas Equity Partners, (NYSE: WGP) and Phillips 66 (NYSE:PSX) are both mid-cap oils/energy companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, risk, earnings, valuation, profitabiliy, analyst recommendations and dividends.

Profitability

This table compares Western Gas Equity Partners, and Phillips 66’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Western Gas Equity Partners, 17.50% 8.78% 4.69%
Phillips 66 1.87% 6.29% 2.93%

Analyst Ratings

This is a summary of recent ratings and target prices for Western Gas Equity Partners, and Phillips 66, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Western Gas Equity Partners, 0 2 6 0 2.75
Phillips 66 0 7 3 0 2.30

Western Gas Equity Partners, presently has a consensus price target of $51.25, indicating a potential upside of 26.39%. Phillips 66 has a consensus price target of $82.33, indicating a potential downside of 2.55%. Given Western Gas Equity Partners,’s stronger consensus rating and higher possible upside, analysts plainly believe Western Gas Equity Partners, is more favorable than Phillips 66.

Insider and Institutional Ownership

18.5% of Western Gas Equity Partners, shares are owned by institutional investors. Comparatively, 69.8% of Phillips 66 shares are owned by institutional investors. 0.5% of Phillips 66 shares are owned by 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.

Earnings and Valuation

This table compares Western Gas Equity Partners, and Phillips 66’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Western Gas Equity Partners, $2.03 billion 4.37 $944.00 million $1.63 24.88
Phillips 66 $79.20 billion 0.55 $2.21 billion $3.35 25.22

Phillips 66 has higher revenue and earnings than Western Gas Equity Partners,. Western Gas Equity Partners, is trading at a lower price-to-earnings ratio than Phillips 66, indicating that it is currently the more affordable of the two stocks.

Dividends

Western Gas Equity Partners, pays an annual dividend of $2.11 per share and has a dividend yield of 5.2%. Phillips 66 pays an annual dividend of $2.80 per share and has a dividend yield of 3.3%. Western Gas Equity Partners, pays out 129.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Phillips 66 pays out 83.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Western Gas Equity Partners, has increased its dividend for 3 consecutive years and Phillips 66 has increased its dividend for 5 consecutive years.

Volatility and Risk

Western Gas Equity Partners, has a beta of 1.56, suggesting that its stock price is 56% more volatile than the S&P 500. Comparatively, Phillips 66 has a beta of 1.22, suggesting that its stock price is 22% more volatile than the S&P 500.

Summary

Western Gas Equity Partners, beats Phillips 66 on 9 of the 17 factors compared between the two stocks.

About Western Gas Equity Partners,

Western Gas Equity Partners, LP is a limited partnership. The Company is formed to own approximately three types of partnership interests in Western Gas Partners, LP (WES). WES is an master limited partnership (MLP) engaged in the business of gathering, compressing, treating, processing and transporting natural gas, and gathering, stabilizing and transporting condensate, natural gas liquids (NGLs) and crude oil. WES provides these midstream services for Anadarko Petroleum Corporation (Anadarko), as well as for third-party producers and customers. Its assets and investments are located in the Rocky Mountains (Colorado, Utah and Wyoming), North-central Pennsylvania and Texas. The Bison treating facility treats and compresses gas from coal-bed methane wells in the Powder River Basin of Wyoming. MIGC, LLC receives gas from various coal-bed methane gathering systems in the Powder River Basin and the Hilight system, as well as from WBI Energy Transmission, Inc.

About Phillips 66

Phillips 66 is an energy manufacturing and logistics company with midstream, chemicals, refining, and marketing and specialties businesses. The Company operates through four segments: Midstream, Chemicals, Refining, and Marketing and Specialties (M&S). The Midstream segment gathers, processes, transports and markets natural gas, and transports, stores, fractionates and markets natural gas liquids (NGLs) in the United States. The Chemicals segment consists of its equity investment in Chevron Phillips Chemical Company LLC (CPChem), which manufactures and markets petrochemicals and plastics. The Refining segment buys, sells and refines crude oil and other feedstocks at refineries in the United States and Europe. The M&S segment purchases for resale and markets refined petroleum products, such as gasolines, distillates and aviation fuels, primarily in the United States and Europe, as well as includes the manufacturing and marketing of specialty products, and power generation operations.

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