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ET vs. WMB: Which Oil & Gas Midstream Stock is a Smarter Buy?
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The Zacks Oil & Gas – Production & Pipelines industry plays a vital role in supporting the nation’s energy security and economic stability. The United States relies heavily on an extensive and efficient pipeline network to transport hydrocarbons from major production regions, like the Permian, Bakken, and Marcellus basins, to refineries, export terminals and consumers. The long-term investment outlook for this industry looks bright due to steady domestic energy consumption, the growth of liquefied natural gas ("LNG") exports, and the ongoing shift by utilities from coal to natural gas. Pipeline operators typically benefit from stable, fee-based revenue streams secured through long-term contracts, offering insulation from commodity price fluctuations.
The pipeline industry is well-positioned to benefit from regulatory support, modernization efforts, and innovations that enhance efficiency and reduce emissions. Amid global energy uncertainty, U.S. pipeline infrastructure has become increasingly strategic, especially for supporting allies abroad. Energy Transfer (ET - Free Report) and The Williams Companies (WMB - Free Report) are key operators in the midstream space, offering investors exposure to energy transport and storage, along with solid income potential.
Energy Transfer is a diversified midstream company with operations spanning crude oil, NGLs, refined products and natural gas pipelines, along with storage and processing facilities. It also has a strong presence in the Permian Basin. The firm also operates the Dakota Access Pipeline and owns interests in export terminals, giving it an expansive footprint and additional avenues for cash generation.
The Williams Companies is a leading natural gas infrastructure provider in North America, offering a strong investment case due to its strategic assets, stable fee-based revenues, and key role in connecting major production basins to growing domestic and export markets. Its resilient business model supports consistent cash flow and attractive dividends.
As production volumes of hydrocarbons continue to increase in the United States, demand for midstream services remains strong. In the given backdrop, let’s closely compare the fundamentals of these two stocks to determine which one is a better option for investment now.
WMB & ET’s Earnings Growth Projections
The Zacks Consensus Estimate for WMB’s 2025 earnings has remained unchanged in the past 60 days, and 2026 earnings has declined by 2.03% in the same time frame.
WMB’s Earnings Estimate
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Energy Transfer’s 2025 and 2026 earnings has increased by 2.86% and 4.26%, respectively, in the past 60 days.
ET's Earnings Estimate
Image Source: Zacks Investment Research
Return on Equity (ROE)
ROE is an essential financial indicator that evaluates a company’s efficiency in generating profits from the equity invested by its shareholders. It demonstrates how well management is utilizing the capital provided to increase earnings and deliver value. WMB’s current ROE is 15.95% compared with ET’s ROE of 11.47%. WMB outperforms the sector’s ROE of 14.67%.
Debt to Capital
The oil and gas midstream industry is capital-intensive. The firms operating in this space need to borrow to fund their capital projects. At present, ET’s debt to capital is 56.43% compared with its sector’s average of 36.85%. WMB’s debt to capital is 64.84%.
The Williams Companies currently has a higher debt compared to ET to run its operations, along with that WMB’s current ratio at the end of the first quarter of 2025 was 0.40, which raises some concerns about WMB’s financial flexibility.
Long-Term Capital Expenditure Plans
Oil and gas midstream services is a capital-intensive industry, and the operators have to make substantial investments to develop new pipelines, and upgrade, maintain and create storage facilities.
Energy Transfer has made significant capital investments in the past five years. For 2025, the firm expects its growth capital expenditures to be nearly $5 billion. Maintenance capital expenditures for 2025 are expected to be approximately $1.1 billion.
The Williams Companies has a robust pipeline of fully contracted projects and makes systematic investments to upgrade and maintain its extensive midstream infrastructure. WMB’s maintenance capital expenditure for 2025 is pegged in the range of $800-$900 million.
Valuation
Energy Transfer is currently trading at a discount compared with The Williams Companies on a Price/ Earnings, forward 12-month basis ( P/E F12M).
ET’s units are currently trading at 12.2X P/E F12M compared with Zacks Oil & Energy Sector P/E F12M of 12.36X and WMB’s P/EF12M of 26.88X.
Price Performance
In the last month, units of Energy Transfer have gained 6.9% compared with The Williams Companies’ rally of 2.5%. The Oil and Energy sector has gained 3.7% in the same time frame.
Conclusion
Energy Transfer has a more diversified midstream portfolio and stands to benefit from higher fee-based earnings, systematic investments and initiatives to expand its fractionation capacity. The Williams Companies is set to benefit from rising natural gas demand driven by AI and data centers, with a strong pipeline network.
Given the above discussion, our pick from the midstream space is Energy Transfer, currently carrying a Zacks Rank #2 (Buy), over The Williams Companies, which carries a Zacks Rank #3 (Hold) at present.
Image: Bigstock
ET vs. WMB: Which Oil & Gas Midstream Stock is a Smarter Buy?
The Zacks Oil & Gas – Production & Pipelines industry plays a vital role in supporting the nation’s energy security and economic stability. The United States relies heavily on an extensive and efficient pipeline network to transport hydrocarbons from major production regions, like the Permian, Bakken, and Marcellus basins, to refineries, export terminals and consumers. The long-term investment outlook for this industry looks bright due to steady domestic energy consumption, the growth of liquefied natural gas ("LNG") exports, and the ongoing shift by utilities from coal to natural gas. Pipeline operators typically benefit from stable, fee-based revenue streams secured through long-term contracts, offering insulation from commodity price fluctuations.
The pipeline industry is well-positioned to benefit from regulatory support, modernization efforts, and innovations that enhance efficiency and reduce emissions. Amid global energy uncertainty, U.S. pipeline infrastructure has become increasingly strategic, especially for supporting allies abroad. Energy Transfer (ET - Free Report) and The Williams Companies (WMB - Free Report) are key operators in the midstream space, offering investors exposure to energy transport and storage, along with solid income potential.
Energy Transfer is a diversified midstream company with operations spanning crude oil, NGLs, refined products and natural gas pipelines, along with storage and processing facilities. It also has a strong presence in the Permian Basin. The firm also operates the Dakota Access Pipeline and owns interests in export terminals, giving it an expansive footprint and additional avenues for cash generation.
The Williams Companies is a leading natural gas infrastructure provider in North America, offering a strong investment case due to its strategic assets, stable fee-based revenues, and key role in connecting major production basins to growing domestic and export markets. Its resilient business model supports consistent cash flow and attractive dividends.
As production volumes of hydrocarbons continue to increase in the United States, demand for midstream services remains strong. In the given backdrop, let’s closely compare the fundamentals of these two stocks to determine which one is a better option for investment now.
WMB & ET’s Earnings Growth Projections
The Zacks Consensus Estimate for WMB’s 2025 earnings has remained unchanged in the past 60 days, and 2026 earnings has declined by 2.03% in the same time frame.
WMB’s Earnings Estimate
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Energy Transfer’s 2025 and 2026 earnings has increased by 2.86% and 4.26%, respectively, in the past 60 days.
ET's Earnings Estimate
Image Source: Zacks Investment Research
Return on Equity (ROE)
ROE is an essential financial indicator that evaluates a company’s efficiency in generating profits from the equity invested by its shareholders. It demonstrates how well management is utilizing the capital provided to increase earnings and deliver value. WMB’s current ROE is 15.95% compared with ET’s ROE of 11.47%. WMB outperforms the sector’s ROE of 14.67%.
Debt to Capital
The oil and gas midstream industry is capital-intensive. The firms operating in this space need to borrow to fund their capital projects. At present, ET’s debt to capital is 56.43% compared with its sector’s average of 36.85%. WMB’s debt to capital is 64.84%.
The Williams Companies currently has a higher debt compared to ET to run its operations, along with that WMB’s current ratio at the end of the first quarter of 2025 was 0.40, which raises some concerns about WMB’s financial flexibility.
Long-Term Capital Expenditure Plans
Oil and gas midstream services is a capital-intensive industry, and the operators have to make substantial investments to develop new pipelines, and upgrade, maintain and create storage facilities.
Energy Transfer has made significant capital investments in the past five years. For 2025, the firm expects its growth capital expenditures to be nearly $5 billion. Maintenance capital expenditures for 2025 are expected to be approximately $1.1 billion.
The Williams Companies has a robust pipeline of fully contracted projects and makes systematic investments to upgrade and maintain its extensive midstream infrastructure. WMB’s maintenance capital expenditure for 2025 is pegged in the range of $800-$900 million.
Valuation
Energy Transfer is currently trading at a discount compared with The Williams Companies on a Price/ Earnings, forward 12-month basis ( P/E F12M).
ET’s units are currently trading at 12.2X P/E F12M compared with Zacks Oil & Energy Sector P/E F12M of 12.36X and WMB’s P/EF12M of 26.88X.
Price Performance
In the last month, units of Energy Transfer have gained 6.9% compared with The Williams Companies’ rally of 2.5%. The Oil and Energy sector has gained 3.7% in the same time frame.
Conclusion
Energy Transfer has a more diversified midstream portfolio and stands to benefit from higher fee-based earnings, systematic investments and initiatives to expand its fractionation capacity. The Williams Companies is set to benefit from rising natural gas demand driven by AI and data centers, with a strong pipeline network.
Given the above discussion, our pick from the midstream space is Energy Transfer, currently carrying a Zacks Rank #2 (Buy), over The Williams Companies, which carries a Zacks Rank #3 (Hold) at present.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.