Williams Companies and Other Energy Stocks Worth a Look Now
The National Association of Publicly Traded Partnerships (NAPTP) is holding its investor conference this week. And there is more to cheer about this year, now that master limited partnerships (MLPs) are up 22.6% so far this year. MLPs underperformed the broader markets last year.
Among the conference attendees are analysts from Credit Suisse, which has offered a list of MLP and affiliated stock picks. They see considerably more potential upside in Cheniere Energy (NYSE: LNG), Targa Resources (NYSE: TRGP) and Williams Companies (NYSE: WMB) than analysts at large. Below is a quick look at how these three stocks have fared and what analysts expect from them.
This Houston-based energy company is focused on liquefied natural gas (LNG) related businesses, and it sports a market capitalization of more than $6 billion. It offers no dividend yield, but affiliated MLP Cheniere Energy Partners (NYSE: CNQ) offers a dividend yield near six percent.
The short interest in Cheniere Energy was more than five percent of the float as of the April 30 settlement date. That was the lowest number of shares sold short since last June. However, days to cover rose in the most recent period to less than four, though that is still down from about seven back in February.
All seven of the analysts that follow the stock and were polled by Thomson/First Call recommend buying shares, with three of them rating the stock at Strong Buy. The mean price target, or where the analysts expect the share price to go, indicates more than six percent potential upside. But the Credit Suisse target is more than 19 percent higher than the current share price.
The share price is more than 55 percent higher than at the beginning of the year, and shares are trading near the 52-week high. Over the past six months, the stock has outperformed larger competitors BP (NYSE: BP) and ConocoPhillips (NYSE: COP), as well as the broader markets.
This midstream natural gas and natural gas liquids (NGLs) services provider has a market cap of almost $3 billion. The dividend yield is about 2.9 percent. The long-term earnings per share (EPS) growth forecast is about 22 percent, and the return on equity is more than 29 percent. But note that the price-to-earnings (P/E) ratio is higher than the industry average.
The short interest in this Houston-based company was near two percent of the total float at the end of April. That was the second lowest number of shares sold short in the past year. But days to cover rose in the most recent period from about three to about four.
Ten of the 13 analysts surveyed recommend buying shares, with four of them rating the stock at Strong Buy. And the analysts think shares have some headroom, as their mean price target is almost eight percent higher than the current share price. Credit Suisse’s target indicates more than 17 percent upside and would a new multiyear high.
The share price has pulled back a bit from a recent 52-week high, but it is still more than 23 percent higher year-to-date. Over the past six months, the stock has outperformed the likes of Enterprise Products Partners (NYSE: EPD) and ONEOK Partners (NYSE: OKS), as well as the broader markets.
This energy infrastructure company is headquartered in Tulsa, Oklahoma. It has a market cap of more than $25 billion and offers a dividend of about 3.6 percent. The long-term EPS growth forecast is more than 14 percent. Williams Companies’ operating margin is higher than the industry average, and its return on equity is more than 17 percent.
The number of Williams Companies shares sold short as of the most recent settlement date represented a bit more than three percent of the total float. That was highest level of short interest since last June, after rising for four periods in a row. The days to cover rose to about four for the first time in a year.
Of the 15 analysts polled, 12 of them recommend buying shares. Just one analyst rates the stock at Underperform. Their mean price target suggests that the analysts on average see about eight percent upside potential. The Credit Suisse target is more than 23 percent higher than the current share price.
The share price is about 11 percent higher than at the beginning of the year. Williams Companies shares pulled back about five percent in early May but have since recovered. But the stock has underperformed peer Kinder Morgan (NYSE: KMI), as well as the broader markets, over the past six months.
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