Cheniere Energy (LNG) stock rallied ~13% in the last 12 months. The stock is trading at a forward EV-to-EBITDA multiple of 13.5x based on its projected earnings for the next 12 months. Peers’ average forward valuation is close to ~12x. So, Cheniere Energy stock appears relatively expensive compared to its peers. However, the company’s earnings are expected to increase ~30% in 2019, according to the estimates. Cheniere Energy’s valuation is higher than many of its peers. The company’s healthy earnings growth likely justifies the premium valuation.
Williams Companies (WMB) stock is trading at a forward EV-to-EBITDA multiple of 11x based on its estimated earnings. The company’s five-year historical average multiple is ~18x. Williams Companies looks cheap compared to those multiples and its historical average. Kinder Morgan (KMI) is trading at a valuation multiple close to 10x, which is lower than the industry average.
Cheniere Energy Partners (CQP) offers a distribution yield of 5.4%, which is higher than Kinder Morgan’s yield of 4.2%. Williams Companies is trading at a yield of 5.5%.
The above chart compares the stock price movements for Cheniere Energy with the Global X MLP and Infrastructure ETF (MLPX) and broader markets. Cheniere accounts for 7% of MLPX, while Kinder Morgan (KMI) and Williams Companies (WMB) account for almost 9% and 8%, respectively.