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WMB

Williams Companies NYSE:WMB Stock Report

Last Price

US$29.43

Market Cap

US$35.9b

7D

3.6%

1Y

7.6%

Updated

03 Oct, 2022

Data

Company Financials +
WMB fundamental analysis
Snowflake Score
Valuation3/6
Future Growth2/6
Past Performance4/6
Financial Health0/6
Dividends5/6

WMB Stock Overview

The Williams Companies, Inc., together with its subsidiaries, operates as an energy infrastructure company primarily in the United States.

The Williams Companies, Inc. Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Williams Companies
Historical stock prices
Current Share PriceUS$29.43
52 Week HighUS$37.97
52 Week LowUS$24.86
Beta1.19
1 Month Change-12.72%
3 Month Change-2.42%
1 Year Change7.64%
3 Year Change25.34%
5 Year Change-2.10%
Change since IPO344.23%

Recent News & Updates

Sep 12
If EPS Growth Is Important To You, Williams Companies (NYSE:WMB) Presents An Opportunity

If EPS Growth Is Important To You, Williams Companies (NYSE:WMB) Presents An Opportunity

It's common for many investors, especially those who are inexperienced, to buy shares in companies with a good story...

Sep 08

Williams buys NorTex Midstream assets in $423M deal

Williams (NYSE:WMB) has acquired NorTex Midstream from an affiliate of Tailwater Capital in a $423M, the energy infrastructure company announced on Thursday. NorTex is a fully contracted natural gas pipeline and storage asset located in north Texas. The deal covers ~80 miles of natural gas transmission pipelines and 36 Bcf of natural gas storage in the Dallas-Fort Worth market. The acquired assets will provide critical gas supply to power generation in north Texas, while positioning Williams (WMB) to deliver storage services for Permian gas directed toward growing Gulf Coast LNG demand. "We see significant upside to integrating these assets, especially when combined with our existing transmission and storage capabilities," said Williams President and CEO Alan Armstrong on the deal. WMB shares are down 2% pre-market

Aug 23

The Williams Companies: Strong Growth And A 4.78% Yield

The Williams Companies is one of the largest natural gas-focused midstream companies in the United States and this positions it very well for growth going forward. The company is expanding its infrastructure network to supply three billion cubic feet of natural gas to electric utilities in order to serve the growing demand. There may be substantially more growth available soon since that capacity will not be nearly enough as coal plants continue to be replaced with natural gas. The company has a 4.78% yield that looks to be remarkably sustainable and growing. The company could be an excellent way for an investor to generate income as the natural gas story plays out. The Williams Companies, Inc. (WMB) is one of the largest natural gas-focused midstream companies in the United States. This is a very good place to be as natural gas has incredibly strong forward growth potential, which sets up the company for powerful prospects. This is a very real advantage that the company has over some of its peers that do not have such strong growth prospects. Unfortunately, The Williams Companies only has a 4.78% yield at the current price, which is much less than other firms in the same industry. However, the company does have some of the same qualities that midstream investors typically appreciate, such as incredibly stable cash flows that are independent of the conditions in the broader economic environment. As some readers may recall, I have discussed The Williams Companies before (notably here) but several months have passed since then and the company has had several news announcements along with an earnings release so it may be time to revisit our thesis. Overall though, the company still remains a great way to earn a high yield from the growing demand for natural gas, including liquefied natural gas. About The Williams Companies As mentioned in the introduction, The Williams is one of the largest natural gas-focused midstream companies in the United States, boasting infrastructure stretching across the country: The Williams Companies In total, the company has 24.4 billion feet per day of natural gas gathering capacity, 23.7 million dekatherms per day of natural gas transmission capacity, and 7.4 billion cubic feet per day of natural gas processing capacity. Although the company has infrastructure all over the nation, by far its most important asset is the Transco pipeline system that stretches across much of the East Coast, going from Texas to New York City. This system by itself carries approximately 15% of all natural gas consumed in the United States. The system is also likely to be the focal point of the company's growth going forward. As we can see here, the company currently has $1.5 billion worth of growth projects that are scheduled to come online over the next few years, all of which are intended to serve some region that is along the Transco system: The Williams Companies In a previous article, I stated that one of the dominant trends in the energy industry right now is electric utilities retiring their old coal-fired power plants in favor of natural gas-fired ones. This is because natural gas burns much cleaner than coal and is actually reliable enough to support the needs of a modern economy, which separates it from renewables. A number of these new gas plants are being constructed along the East Coast and The Williams Companies is in a prime position to satisfy the need that these plants will have for natural gas due to the presence and scale of the Transco system. The company is indeed moving to take advantage of these opportunities. The company has six projects in development that are intended to provide approximately three billion cubic feet of natural gas per day to these powerplants. These projects will admittedly have a very limited near-term impact on the company. This is because none of them is scheduled to come online before 2027. Thus, the company will not see any cash flow growth from them for a number of years. A long-term investor may not mind this as much, however. The nice thing about these projects is that we know that this cash flow growth will actually occur. This is because The Williams Companies has already secured contracts from its customers for the use of this new capacity. The reason that we as investors should appreciate this is that the company is spending $2 billion to build out these new projects. The fact that the company already has the customer contracts in place ensures that this money will not be spent on things that nobody wants to use. In addition to this, The Williams Companies knows in advance exactly how profitable these projects will be so it knows that it will earn a sufficient return on its investment. The company has not divulged exactly how profitable they will each be, but on average a project that the company undertakes pays for itself in about six years so that is probably a fair estimate here. This is certainly reasonable for fairly low-risk projects like these, although historically Kinder Morgan (KMI) manages to achieve better rates of return on its projects. In the introduction, I stated that The Williams Companies enjoys remarkably stable cash flows regardless of the conditions in the broader economy. This is mostly because of its business model that revolves around entering into long-term contracts with its customers under which the fee paid by the customer is independent of energy prices. As these contracts are typically five to ten years in length, they should outlast any economic problems such as what we saw in 2020. In fact, The Williams Companies has consistently increased its cash flows over the 2018 to 2022 period, including in 2020: The Williams Companies The company managed to continue this historic growth streak in the second quarter of 2022 as its adjusted EBITDA (a proxy for pre-tax cash flow) was up 14% compared to the prior-year quarter. This was mostly due to the company's customers increasing their natural gas production and sending more resources through the firm's infrastructure than back in 2021. As one of the methods under which The Williams Companies receives compensation from its contracts is by charging based on volumes handled, these higher volumes resulted in higher cash flows. In fact, the company's performance was so strong during the quarter that it prompted management to increase its cash flow guidance for 2022. This is something that any investor should appreciate. Fortunately, the forward fundamentals point to growing natural gas demand, and by extension, volumes for The Williams Companies over the coming decade or two. Fundamentals Of Natural Gas As just stated, the fundamentals for natural gas are quite strong and point to growing production going forward. This should prove beneficial for The Williams Companies since the company's core business depends mostly on resource volumes. As already mentioned, one source of natural gas demand growth comes from the utility sector, specifically electric utilities. This comes from concerns about climate change related to carbon emissions. As coal is the most heavily polluting fuel in use today, utility companies have been looking to replace their coal-fired power plants with alternatives. Renewables are a common choice but renewables are not reliable enough to handle the needs of a modern grid on their own. After all, wind power does not work if the air is still and solar power does not work if the sun is not shining. Thus, something else is needed to supplement renewable power to ensure that the grid remains powered and performs properly. Natural gas plants are the logical choice for this because it burns very cleanly and is as reliable as coal. There are currently 58 coal plants along the East Coast that produce approximately sixty gigawatts of power. If all of this capacity were to be replaced with natural gas, it would increase consumption by 9.5 billion cubic feet per day. This is substantially more than the two billion cubic feet per day that The Williams Companies currently has in development so it is quite possible that the company may have some growth potential beyond what it is already working on. This should obviously be very attractive for long-term investors if it plays out. Dividend Analysis One of the biggest reasons why investors purchase shares of The Williams Companies is because of the dividend that it pays out. Indeed, as of the time of writing, the company yields 4.78%, which is substantially better than the 1.42% yield of the S&P 500 index (SPY). Perhaps more importantly, the company has a long history of increasing its payout to investors every year: Seeking Alpha

Shareholder Returns

WMBUS Oil and GasUS Market
7D3.6%2.2%-2.5%
1Y7.6%32.0%-23.2%

Return vs Industry: WMB underperformed the US Oil and Gas industry which returned 32% over the past year.

Return vs Market: WMB exceeded the US Market which returned -23.2% over the past year.

Price Volatility

Is WMB's price volatile compared to industry and market?
WMB volatility
WMB Average Weekly Movement4.5%
Oil and Gas Industry Average Movement8.0%
Market Average Movement6.8%
10% most volatile stocks in US Market15.5%
10% least volatile stocks in US Market2.8%

Stable Share Price: WMB is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: WMB's weekly volatility (4%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
19084,783Murray Armstronghttps://www.williams.com

The Williams Companies, Inc., together with its subsidiaries, operates as an energy infrastructure company primarily in the United States. It operates through Transmission & Gulf of Mexico, Northeast G&P, West, and Gas & NGL Marketing Services segments. The Transmission & Gulf of Mexico segment comprises Transco and Northwest natural gas pipelines; and natural gas gathering and processing, and crude oil production handling and transportation assets in the Gulf Coast region, as well as various petrochemical and feedstock pipelines.

The Williams Companies, Inc. Fundamentals Summary

How do Williams Companies's earnings and revenue compare to its market cap?
WMB fundamental statistics
Market CapUS$35.86b
Earnings (TTM)US$1.56b
Revenue (TTM)US$10.89b

22.9x

P/E Ratio

3.3x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
WMB income statement (TTM)
RevenueUS$10.89b
Cost of RevenueUS$5.76b
Gross ProfitUS$5.13b
Other ExpensesUS$3.57b
EarningsUS$1.56b

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)1.28
Gross Margin47.11%
Net Profit Margin14.36%
Debt/Equity Ratio164.2%

How did WMB perform over the long term?

See historical performance and comparison

Dividends

5.8%

Current Dividend Yield

130%

Payout Ratio