Q: Is there a clear case for preferring L to WN? L is more liquid while WN does slightly better on P/E and RoE; does liquidity win, here?
5i Research Answer:
Year to date performance and one year performance has been very similar. WN has a slightly higher yield. L is larger (2X), WN is cheaper on P/E (18x vs 23x). Of course, owning WN gets you 52% exposure to L through its ownership position. Over 10 years, L has risen 295% and WN 134%. We think liquidity wins here, and we would prefer L overall. Though we would still be fully comfortable owning WN. But L wins the straight-up contest for us.