The Williams Companies, Inc. (NYSE:WMB) was trading at around $71 on October 5, and Kinder Morgan, Inc. (NYSE:KMI) at around $32. Both own pipelines and charge for moving gas through them. Neither produces the gas or sets its price.
When two companies collect tolls on similar assets, the comparison comes down to how much they collect per dollar of revenue and what they paid for the pipe.
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Williams Collects More on Every Dollar:
Start with what each company keeps from a dollar of toll. Williams produced $3.07 billion of net profit from $12.32 billion of revenue. Kinder Morgan produced $3.45 billion from $17.96 billion.
Almost the same profit from two-thirds of the sales. For two businesses charging for the same service, that gap has to come from which pipelines they own and what sits at either end of them. The margins put a number on it, at 39.54% operating against 30.07%. Nine points between two toll collectors is not noise.
Return on equity doubles the point, at 21.50% against 10.99%, and earnings grew 51.50% last quarter against 21.30%. On every measure of how well the asset converts, Williams is the better business.
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Kinder Morgan Costs Far Less for the Same Tolls:
Then you look at what each one costs, and the ranking inverts. Williams trades at 6.77 times book value. Kinder Morgan trades at 2.20 times.
For a business whose value is literally pipe in the ground, book value is the measure that matters, and Williams costs three times as much per dollar of recorded asset. The gap narrows once debt is counted, to 14.85 times enterprise value to EBITDA against 13.21 times, because Williams carries debt-to-equity of 200.37% against 98.62%.
Cash flow is where it stops being about price at all. Kinder Morgan produced $1.08 billion of levered free cash flow. Williams produced negative $1.52 billion. That is the better margin funding construction rather than owners. Williams is building pipe, and the building currently costs more than the tolls bring in, which is also why it yields 2.98% against 3.80%.
Both are held for the distribution, so the comparison that matters is against other payers. We ranked this year’s best performers here.
The Valuation Case:
Williams traded near $71 on October 5 after rising 10.95% over twelve months. Kinder Morgan traded near $32, up 11.24%.
Sustainability is identical and sits outside both. Pipelines earn while gas flows, and neither management decides how much gas there is. On price, Kinder Morgan is cheaper on book value and on enterprise value. It also pays more and funds that distribution from cash it generated.
Williams answers with nine more points of margin, double the return on equity, and faster earnings growth. A PEG ratio of 2.07 at Williams against 3.19 at Kinder Morgan is the one measure pointing back the other way. Ten stocks positioned for high returns in 2026 are named here.
Conclusion:
Kinder Morgan is the better of the two. It costs 2.20 times book against 6.77 times for assets doing the same job, pays 3.80% against 2.98%, and funds that distribution from $1.08 billion it generated rather than from borrowing. However, Williams converts a dollar of toll into far more profit, earning nine more points of operating margin and double the return on equity. Its negative $1.52 billion is construction rather than deterioration. The number to watch at Williams is free cash flow, because it turns positive the moment the building slows.
Market Sentiment:
The Williams Companies, Inc. was held by 79 hedge funds with a combined stake value of about $2.13 billion at the end of Q2 2026 in the Insider Monkey database. This is down from 84 hedge fund holders with a cumulative investment value of around $2.14 billion in the previous quarter.
Kinder Morgan, Inc. was held by 60 hedge funds with a combined stake value of about $1.92 billion at the end of the same quarter. This is down from 62 hedge fund holders with a cumulative investment value of around $2.28 billion three months earlier.
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This article is originally published at Insider Monkey.
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