Western Gas Equity Partners (NYSE: WGP) and Marathon Petroleum (NYSE:MPC) are both oils/energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, valuation, risk, earnings, analyst recommendations, dividends and institutional ownership.
Western Gas Equity Partners pays an annual dividend of $2.19 per share and has a dividend yield of 6.1%. Marathon Petroleum pays an annual dividend of $1.84 per share and has a dividend yield of 2.7%. Western Gas Equity Partners pays out 127.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Marathon Petroleum pays out 48.3% of its earnings in the form of a dividend. Western Gas Equity Partners has raised its dividend for 4 consecutive years and Marathon Petroleum has raised its dividend for 7 consecutive years.
Western Gas Equity Partners has a beta of 1.47, meaning that its share price is 47% more volatile than the S&P 500. Comparatively, Marathon Petroleum has a beta of 1.51, meaning that its share price is 51% more volatile than the S&P 500.
Valuation & Earnings
This table compares Western Gas Equity Partners and Marathon Petroleum’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Western Gas Equity Partners||$2.25 billion||3.52||$376.60 million||$1.72||20.99|
|Marathon Petroleum||$75.37 billion||0.44||$3.43 billion||$3.81||18.18|
Marathon Petroleum has higher revenue and earnings than Western Gas Equity Partners. Marathon Petroleum is trading at a lower price-to-earnings ratio than Western Gas Equity Partners, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
17.9% of Western Gas Equity Partners shares are held by institutional investors. Comparatively, 80.4% of Marathon Petroleum shares are held by institutional investors. 1.1% of Marathon Petroleum shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
This table compares Western Gas Equity Partners and Marathon Petroleum’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Western Gas Equity Partners||16.75%||9.40%||4.81%|
This is a breakdown of current recommendations and price targets for Western Gas Equity Partners and Marathon Petroleum, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Western Gas Equity Partners||0||3||7||0||2.70|
Western Gas Equity Partners currently has a consensus target price of $49.78, indicating a potential upside of 37.85%. Marathon Petroleum has a consensus target price of $79.10, indicating a potential upside of 14.19%. Given Western Gas Equity Partners’ stronger consensus rating and higher possible upside, research analysts clearly believe Western Gas Equity Partners is more favorable than Marathon Petroleum.
Marathon Petroleum beats Western Gas Equity Partners on 10 of the 17 factors compared between the two stocks.
Western Gas Equity Partners Company Profile
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.
Marathon Petroleum Company Profile
Marathon Petroleum Corporation is engaged in refining, marketing, retail and transportation businesses in the United States and the largest east of the Mississippi. The Company operates through three segments: Refining & Marketing; Speedway; and Midstream. The Refining & Marketing segment refines crude oil and other feedstocks at the Company’s seven refineries in the Gulf Coast and Midwest regions of the United States. Its Speedway segment sells transportation fuels and convenience products in the retail market in the Midwest, East Coast and Southeast regions of the United States. The Company’s Midstream is engaged in the operations of MPLX LP and certain other related operations. It gathers, processes and transports natural gas, natural gas liquids (NGLs), crude oil and refined products. MPLX is a limited partnership which owns, operates, develops and acquires midstream energy infrastructure assets.
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