Analyzing Williams Partners’ Total Return Performance



Williams Partners’ total return performance

Williams Partners (WPZ) is expected to release its 3Q15 earnings on October 29, 2015. In this series, we’ll talk about WPZ’s 3Q estimates, distribution guidance for the rest of 2015, WPZ’s commodity price exposure, and analyst recommendations. But first, let’s analyze WPZ’s YTD (year-to-date) total return performance. Total returns include both capital appreciation and distribution income.

Williams Partners has generated total returns of -34.4% since the start of this year. Over the same timeframe, WPZ’s general partner, Williams Companies (WMB), has returned -4.7%. Both WPZ and WMB crashed following the merger announcement of Energy Transfer Equity (ETE) with Williams Companies on September 28, 2015. In fact, the entire midstream sector was down after the deal announcement, as the above image shows. We have explored the reasons for this crash in A Complete Guide to the Energy Transfer-Williams Merger.

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WPZ peers Spectra Energy Partners (SEP), Enbridge Energy Partners (EEP), and Enterprise Product Partners (EPD) have returned -19.1%, -27.8%, and -18.3% YTD (year-to-date), respectively. This indicates a general weakness in the midstream sector. The Alerian MLP ETF (AMLP) comprises of 23 midstream energy MLPs. Williams Partners underperformed AMLP by 17.8 percentage points. AMLP has returned -16.6% YTD. Together, WPZ, SEP, EEP, and EPD account for 24.4% of AMLP.

About Williams Partners

Williams Partners is a midstream energy infrastructure MLP. As a midstream company, WPZ provides the following services:

  • natural gas gathering, processing, and treating
  • NGL (natural gas liquids) fractionation and transportation
  • crude oil transportation
  • olefin production
  • storage and marketing services for NGL, crude oil, and natural gas

In the next article, we’ll look into WPZ’s 3Q15 revenue estimates.


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