NYSE:WMB

Stock Analysis Report

Executive Summary

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

Rewards

Trading at 43.8% below its fair value

Earnings are forecast to grow 15.5% per year

Became profitable this year

Pays a reliable dividend of 11.5%

Risk Analysis

Interest payments are not well covered by earnings

Dividend of 11.5% is not well covered by earnings or forecast to be in the next 3 years

Highly volatile share price over past 3 months

Large one-off items impacting financial results

+ 1 more risk


Snowflake Analysis

Average dividend payer and slightly overvalued.


Similar Companies

Share Price & News

How has Williams Companies's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: WMB's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

7.0%

WMB

5.9%

US Oil and Gas

7.2%

US Market


1 Year Return

-52.9%

WMB

-56.4%

US Oil and Gas

-10.4%

US Market

Return vs Industry: WMB exceeded the US Oil and Gas industry which returned -57.2% over the past year.

Return vs Market: WMB underperformed the US Market which returned -12.7% over the past year.


Shareholder returns

WMBIndustryMarket
7 Day7.0%5.9%7.2%
30 Day-27.5%-35.6%-12.6%
90 Day-41.7%-51.6%-19.4%
1 Year-49.5%-52.9%-54.6%-56.4%-8.5%-10.4%
3 Year-45.4%-53.8%-51.8%-56.5%15.8%8.3%
5 Year-62.8%-72.7%-55.3%-62.2%35.8%21.0%

Price Volatility Vs. Market

How volatile is Williams Companies's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Williams Companies undervalued compared to its fair value and its price relative to the market?

44.1%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: WMB ($13.91) is trading below our estimate of fair value ($24.73)

Significantly Below Fair Value: WMB is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: WMB is poor value based on its PE Ratio (19.6x) compared to the Oil and Gas industry average (6.7x).

PE vs Market: WMB is poor value based on its PE Ratio (19.6x) compared to the US market (13x).


Price to Earnings Growth Ratio

PEG Ratio: WMB is poor value based on its PEG Ratio (1.3x)


Price to Book Ratio

PB vs Industry: WMB is overvalued based on its PB Ratio (1.3x) compared to the US Oil and Gas industry average (0.5x).


Next Steps

Future Growth

How is Williams Companies forecast to perform in the next 1 to 3 years based on estimates from 11 analysts?

15.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: WMB's forecast earnings growth (15.5% per year) is above the savings rate (1.7%).

Earnings vs Market: WMB's earnings (15.5% per year) are forecast to grow faster than the US market (12.3% per year).

High Growth Earnings: WMB's earnings are forecast to grow, but not significantly.

Revenue vs Market: WMB's revenue (0.1% per year) is forecast to grow slower than the US market (7.3% per year).

High Growth Revenue: WMB's revenue (0.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: WMB's Return on Equity is forecast to be low in 3 years time (12.8%).


Next Steps

Past Performance

How has Williams Companies performed over the past 5 years?

-2.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: WMB has a large one-off loss of $594.0M impacting its December 31 2019 financial results.

Growing Profit Margin: WMB became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: WMB's earnings have declined by -2.2% per year over the past 5 years.

Accelerating Growth: WMB has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: WMB has become profitable in the last year, making it difficult to compare its past year earnings growth to the Oil and Gas industry (-11.4%).


Return on Equity

High ROE: WMB's Return on Equity (4.5%) is considered low.


Next Steps

Financial Health

How is Williams Companies's financial position?


Financial Position Analysis

Short Term Liabilities: WMB's short term assets ($1.6B) do not cover its short term liabilities ($4.0B).

Long Term Liabilities: WMB's short term assets ($1.6B) do not cover its long term liabilities ($25.7B).


Debt to Equity History and Analysis

Debt Level: WMB's debt to equity ratio (136.2%) is considered high.

Reducing Debt: WMB's debt to equity ratio has increased from 107% to 136.2% over the past 5 years.

Debt Coverage: WMB's debt is not well covered by operating cash flow (16.6%).

Interest Coverage: WMB's interest payments on its debt are not well covered by EBIT (0.7x coverage).


Balance Sheet

Inventory Level: WMB has a high level of physical assets or inventory.

Debt Coverage by Assets: WMB's debt is not covered by short term assets (assets are 0.1x debt).


Next Steps

Dividend

What is Williams Companies's current dividend yield, its reliability and sustainability?

11.58%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: WMB's dividend (11.5%) is higher than the bottom 25% of dividend payers in the US market (1.98%).

High Dividend: WMB's dividend (11.5%) is in the top 25% of dividend payers in the US market (5.49%)


Stability and Growth of Payments

Stable Dividend: WMB's dividends per share have been stable in the past 10 years.

Growing Dividend: WMB's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (213.7%), WMB's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: WMB's dividends in 3 years are not forecast to be well covered by earnings (134.9% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.7yrs

Average management tenure


CEO

Murray Armstrong (57yo)

9.17s

Tenure

US$15,590,339

Compensation

Mr. Alan S. Armstrong, also known as Murray, has been Chief Executive Officer of Access Midstream Partners GP, L.L.C. since December 31, 2014. Mr. Armstrong has been the Chief Executive Officer and Preside ...


CEO Compensation Analysis

Compensation vs Market: Murray's total compensation ($USD15.59M) is above average for companies of similar size in the US market ($USD11.74M).

Compensation vs Earnings: Murray's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Alan Armstrong
President9.17yrsUS$15.59m0.069% $11.6m
John Chandler
Senior VP & CFO2.42yrsUS$4.77m0.012% $2.0m
Micheal Dunn
Executive VP & COO3yrsUS$6.61m0.0016% $269.9k
Chad Zamarin
Senior Vice President of Corporate Strategic Development2.67yrsUS$5.27m0.00021% $35.2k
John Porter
VP, Controller & Chief Accounting Officer0.17yrno data0.0017% $285.0k
Brett Krieg
Assistant Director Investor Relationsno datano datano data
Terence Wilson
Senior VP & General Counsel2.83yrsno data0.0066% $1.1m
Debbie Cowan
Senior VP & Chief Human Resource Officer1.42yrsno data0.0029% $481.2k
Walter Bennett
Senior Vice President of Gathering & Processing5.17yrsno data0.013% $2.2m
Scott Hallam
Senior Vice President Transmission & Gulf of Mexico1.17yrsno data0.0060% $1.0m

2.7yrs

Average Tenure

49yo

Average Age

Experienced Management: WMB's management team is considered experienced (2.8 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Alan Armstrong
President9.17yrsUS$15.59m0.069% $11.6m
Stephen Bergstrom
Independent Chairman of the Board2.83yrsUS$485.01k0.0059% $985.8k
Stephen Chazen
Independent Director3.42yrsUS$300.00k0.0036% $600.2k
Scott Sheffield
Independent Director3.58yrsUS$295.00k0.00034% $57.0k
Michael Creel
Independent Director3.25yrsUS$280.00k0.0055% $928.8k
Charles Cogut
Independent Director3.25yrsUS$275.00k0.000080% $13.4k
William Spence
Independent Director3.58yrsUS$300.00k0.0019% $315.2k
Murray Smith
Independent Director8.17yrsUS$295.00k0.0016% $276.6k
Peter Ragauss
Independent Director3.42yrsUS$325.00k0.00028% $46.9k
Kathleen Cooper
Independent Director13.42yrsUS$307.50k0.0022% $360.5k

3.5yrs

Average Tenure

65.5yo

Average Age

Experienced Board: WMB's board of directors are considered experienced (3.5 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: WMB insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 24.5%.


Top Shareholders

Company Information

The Williams Companies, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: The Williams Companies, Inc.
  • Ticker: WMB
  • Exchange: NYSE
  • Founded: 1908
  • Industry: Oil and Gas Storage and Transportation
  • Sector: Energy
  • Market Cap: US$16.765b
  • Shares outstanding: 1.21b
  • Website: https://co.williams.com

Number of Employees


Location

  • The Williams Companies, Inc.
  • One Williams Center
  • Suite 4700
  • Tulsa
  • Oklahoma
  • 74172
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
WMBNYSE (New York Stock Exchange)YesCommon SharesUSUSDJan 1968
WMBDB (Deutsche Boerse AG)YesCommon SharesDEEURJan 1968
WMBXTRA (XETRA Trading Platform)YesCommon SharesDEEURJan 1968
0LXBLSE (London Stock Exchange)YesCommon SharesGBUSDJan 1968
WMBETLX (Eurotlx)YesCommon SharesITEURJan 1968
W1MB34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH REPR 1 COMBRBRLDec 2019

Biography

The Williams Companies, Inc., together with its subsidiaries, operates as an energy infrastructure company primarily in the United States. It operates through Atlantic-Gulf, Northeast G&P, and West segments. The Atlantic-Gulf segment comprises Transco, an interstate natural gas pipeline; and natural gas gathering and processing, and crude oil production handling and transportation assets. The Northeast G&P segment engages in the midstream gathering, processing, and fractionation activities. The West segment comprises Northwest Pipeline, an interstate natural gas pipeline; and gas gathering, processing, and treating operations. The company owns and operates 30,000 miles of pipelines, 28 processing facilities, 7 fractionation facilities, and approximately 23 million barrels of NGL storage capacity. The Williams Companies, Inc. was founded in 1908 and is headquartered in Tulsa, Oklahoma. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/03/31 02:17
End of Day Share Price2020/03/30 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.