Western Gas Equity Partners (WGP) & Boardwalk Pipeline Partners (BWP) Head to Head Contrast

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

Profitability

This table compares Boardwalk Pipeline Partners and Western Gas Equity Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Boardwalk Pipeline Partners 21.29% 6.85% 3.65%
Western Gas Equity Partners 17.52% 9.42% 4.36%

Dividends

Boardwalk Pipeline Partners pays an annual dividend of $0.40 per share and has a dividend yield of 3.3%. Western Gas Equity Partners pays an annual dividend of $2.33 per share and has a dividend yield of 6.4%. Boardwalk Pipeline Partners pays out 29.6% of its earnings in the form of a dividend. Western Gas Equity Partners pays out 135.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Western Gas Equity Partners has increased its dividend for 4 consecutive years. Western Gas Equity Partners is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares Boardwalk Pipeline Partners and Western Gas Equity Partners’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Boardwalk Pipeline Partners $1.32 billion 2.28 $297.00 million $1.35 8.93
Western Gas Equity Partners $2.25 billion 3.53 $376.60 million $1.72 21.08

Western Gas Equity Partners has higher revenue and earnings than Boardwalk Pipeline Partners. Boardwalk Pipeline Partners 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.

Institutional and Insider Ownership

92.6% of Boardwalk Pipeline Partners shares are held by institutional investors. Comparatively, 18.9% of Western Gas Equity Partners shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Boardwalk Pipeline Partners and Western Gas Equity Partners, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Boardwalk Pipeline Partners 1 6 3 0 2.20
Western Gas Equity Partners 0 4 6 0 2.60

Boardwalk Pipeline Partners presently has a consensus price target of $15.56, indicating a potential upside of 29.15%. Western Gas Equity Partners has a consensus price target of $42.30, indicating a potential upside of 16.66%. Given Boardwalk Pipeline Partners’ higher possible upside, research analysts plainly believe Boardwalk Pipeline Partners is more favorable than Western Gas Equity Partners.

Volatility & Risk

Boardwalk Pipeline Partners has a beta of 0.63, meaning that its stock price is 37% less volatile than the S&P 500. Comparatively, Western Gas Equity Partners has a beta of 1.7, meaning that its stock price is 70% more volatile than the S&P 500.

Summary

Western Gas Equity Partners beats Boardwalk Pipeline Partners on 12 of the 16 factors compared between the two stocks.

Boardwalk Pipeline Partners Company Profile

Boardwalk Pipeline Partners, LP, through its subsidiaries, owns and operates integrated natural gas and natural gas liquids and other hydrocarbons (NGLs) pipeline and storage systems in the United States. It operates interstate natural gas and NGLs pipeline systems, and integrated storage facilities, which are located in the Gulf Coast region, Oklahoma, Arkansas and the Midwestern states of Tennessee, Kentucky, Illinois, Indiana and Ohio. The company's pipeline systems contain approximately 13,880 miles of interconnected natural gas pipelines, directly serving customers in 13 states and indirectly serving customers throughout the northeastern and southeastern United States through various interconnections with unaffiliated pipelines. It also owns and operates approximately 455 miles of NGLs pipelines serving customers in Louisiana and Texas. In addition, the company has underground storage caverns having aggregate capacity of approximately 205.0 billion cubic feet of working natural gas and 24.5 million barrels of NGLs. It serves producers of natural gas, local distribution companies, marketers, electric power generators, industrial users, and interstate and intrastate pipelines. The company was founded in 2005 and is headquartered in Houston, Texas. Boardwalk Pipeline Partners, LP is a subsidiary of Boardwalk Pipelines Holding Corp.

Western Gas Equity Partners Company Profile

Western Gas Equity Partners, LP, together with its subsidiaries, engages in the gathering, processing, compressing, treating, stabilizing, and transporting natural gas, condensate, natural gas liquids, and crude oil primarily in the United States. It is also involved in the gathering and disposing of produced water; and buying and selling of natural gas. Western Gas Equity Holdings, LLC serves as the general partner of Western Gas Equity Partners, LP. The company was founded in 2007 and is headquartered in The Woodlands, Texas. Western Gas Equity Partners, LP is a subsidiary of Anadarko Petroleum Corporation.

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