WILLIAMS COS INC (WMB) Stock Fundamental Analysis
NYSE:WMB - New York Stock Exchange, Inc. - US9694571004 - Common Stock - Currency: USD
We assign a fundamental rating of 4 out of 10 to WMB. WMB was compared to 211 industry peers in the Oil, Gas & Consumable Fuels industry. While WMB is still in line with the averages on profitability rating, there are concerns on its financial health. While showing a medium growth rate, WMB is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
WMB had positive earnings in the past year.
In the past year WMB had a positive cash flow from operations.
In the past 5 years WMB has always been profitable.
Each year in the past 5 years WMB had a positive operating cash flow.
1.2 Ratios
WMB's Return On Assets of 4.15% is in line compared to the rest of the industry. WMB outperforms 55.45% of its industry peers.
WMB has a Return On Equity of 18.27%. This is in the better half of the industry: WMB outperforms 78.67% of its industry peers.
Looking at the Return On Invested Capital, with a value of 5.43%, WMB is in line with its industry, outperforming 45.97% of the companies in the same industry.
WMB had an Average Return On Invested Capital over the past 3 years of 5.82%. This is significantly below the industry average of 23.70%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.15% | ||
| ROE | 18.27% | ||
| ROIC | 5.43% |
ROA(3y)4.78%
ROA(5y)3.6%
ROE(3y)20.43%
ROE(5y)15.26%
ROIC(3y)5.82%
ROIC(5y)5.41%
1.3 Margins
WMB's Profit Margin of 21.16% is fine compared to the rest of the industry. WMB outperforms 71.56% of its industry peers.
In the last couple of years the Profit Margin of WMB has grown nicely.
WMB has a better Operating Margin (31.69%) than 71.56% of its industry peers.
WMB's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 79.31%, WMB belongs to the top of the industry, outperforming 90.05% of the companies in the same industry.
WMB's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 31.69% | ||
| PM (TTM) | 21.16% | ||
| GM | 79.31% |
OM growth 3Y8.61%
OM growth 5Y1.79%
PM growth 3Y14.09%
PM growth 5Y15.42%
GM growth 3Y8.76%
GM growth 5Y1.31%
2. Health
2.1 Basic Checks
WMB has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
WMB has about the same amout of shares outstanding than it did 1 year ago.
Compared to 5 years ago, WMB has more shares outstanding
Compared to 1 year ago, WMB has an improved debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 1.09, we must say that WMB is in the distress zone and has some risk of bankruptcy.
WMB has a Altman-Z score (1.09) which is in line with its industry peers.
WMB has a debt to FCF ratio of 13.52. This is a negative value and a sign of low solvency as WMB would need 13.52 years to pay back of all of its debts.
WMB has a Debt to FCF ratio (13.52) which is comparable to the rest of the industry.
WMB has a Debt/Equity ratio of 1.96. This is a high value indicating a heavy dependency on external financing.
WMB has a worse Debt to Equity ratio (1.96) than 80.57% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.96 | ||
| Debt/FCF | 13.52 | ||
| Altman-Z | 1.09 |
ROIC/WACC0.66
WACC8.2%
2.3 Liquidity
A Current Ratio of 0.40 indicates that WMB may have some problems paying its short term obligations.
WMB has a Current ratio of 0.40. This is amonst the worse of the industry: WMB underperforms 90.52% of its industry peers.
A Quick Ratio of 0.36 indicates that WMB may have some problems paying its short term obligations.
WMB's Quick ratio of 0.36 is on the low side compared to the rest of the industry. WMB is outperformed by 91.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.4 | ||
| Quick Ratio | 0.36 |
3. Growth
3.1 Past
WMB shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -10.00%.
Measured over the past years, WMB shows a quite strong growth in Earnings Per Share. The EPS has been growing by 13.18% on average per year.
The Revenue has been growing slightly by 1.73% in the past year.
Measured over the past years, WMB shows a small growth in Revenue. The Revenue has been growing by 5.07% on average per year.
EPS 1Y (TTM)-10%
EPS 3Y10.47%
EPS 5Y13.18%
EPS Q2Q%-3.39%
Revenue 1Y (TTM)1.73%
Revenue growth 3Y-0.39%
Revenue growth 5Y5.07%
Sales Q2Q%10%
3.2 Future
WMB is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 13.84% yearly.
WMB is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 10.65% yearly.
EPS Next Y19.42%
EPS Next 2Y15.31%
EPS Next 3Y14.78%
EPS Next 5Y13.84%
Revenue Next Year16.54%
Revenue Next 2Y11.27%
Revenue Next 3Y10.89%
Revenue Next 5Y10.65%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 32.62 indicates a quite expensive valuation of WMB.
WMB's Price/Earnings ratio is a bit more expensive when compared to the industry. WMB is more expensive than 63.03% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 27.21. WMB is around the same levels.
The Price/Forward Earnings ratio is 24.27, which indicates a rather expensive current valuation of WMB.
WMB's Price/Forward Earnings ratio is a bit more expensive when compared to the industry. WMB is more expensive than 63.03% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.70. WMB is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.62 | ||
| Fwd PE | 24.27 |
4.2 Price Multiples
66.82% of the companies in the same industry are cheaper than WMB, based on the Enterprise Value to EBITDA ratio.
WMB's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 35.37 | ||
| EV/EBITDA | 18.28 |
4.3 Compensation for Growth
WMB's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
WMB has a very decent profitability rating, which may justify a higher PE ratio.
WMB's earnings are expected to grow with 14.78% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.68
PEG (5Y)2.48
EPS Next 2Y15.31%
EPS Next 3Y14.78%
5. Dividend
5.1 Amount
WMB has a Yearly Dividend Yield of 3.18%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 6.66, WMB has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 2.42, WMB pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.18% |
5.2 History
The dividend of WMB has a limited annual growth rate of 4.57%.
WMB has been paying a dividend for at least 10 years, so it has a reliable track record.
WMB has not decreased its dividend in the past 5 years, so it has a somewhat stable track record.
Dividend Growth(5Y)4.57%
Div Incr Years7
Div Non Decr Years7
5.3 Sustainability
102.89% of the earnings are spent on dividend by WMB. This is not a sustainable payout ratio.
The dividend of WMB is growing, but earnings are growing more, so the dividend growth is sustainable.
DP102.89%
EPS Next 2Y15.31%
EPS Next 3Y14.78%
58.72
-4.09 (-6.51%)
Chartmill FA Rating
GICS SectorEnergy
GICS IndustryGroupEnergy
GICS IndustryOil, Gas & Consumable Fuels
Earnings (Last)
Earnings (Next)
Inst Owners88.57%
Inst Owner Change1.87%
Ins Owners0.4%
Ins Owner Change0.45%
Market Cap71.70B
Analysts76
Price Target63.65 (8.4%)
Short Float %1.26%
Short Ratio1.98
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.18% |
Yearly Dividend1.9
Dividend Growth(5Y)4.57%
DP102.89%
Div Incr Years7
Div Non Decr Years7
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-6.72%
Min EPS beat(2)-13.58%
Max EPS beat(2)0.14%
EPS beat(4)2
Avg EPS beat(4)-2.02%
Min EPS beat(4)-13.58%
Max EPS beat(4)10.38%
EPS beat(8)6
Avg EPS beat(8)5.84%
EPS beat(12)9
Avg EPS beat(12)10.21%
EPS beat(16)12
Avg EPS beat(16)10.31%
Revenue beat(2)2
Avg Revenue beat(2)1.92%
Min Revenue beat(2)1.26%
Max Revenue beat(2)2.59%
Revenue beat(4)4
Avg Revenue beat(4)2.1%
Min Revenue beat(4)0.49%
Max Revenue beat(4)4.08%
Revenue beat(8)5
Avg Revenue beat(8)-0.82%
Revenue beat(12)7
Avg Revenue beat(12)0.72%
Revenue beat(16)10
Avg Revenue beat(16)3.95%
PT rev (1m)3.33%
PT rev (3m)5.17%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-1.43%
EPS NY rev (1m)-0.12%
EPS NY rev (3m)1.1%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)4.68%
Revenue NY rev (1m)2.37%
Revenue NY rev (3m)4.32%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.62 | ||
| Fwd PE | 24.27 | ||
| P/S | 6.65 | ||
| P/FCF | 35.37 | ||
| P/OCF | 13.86 | ||
| P/B | 5.74 | ||
| P/tB | 13.35 | ||
| EV/EBITDA | 18.28 |
EPS(TTM)1.8
EY3.07%
EPS(NY)2.42
Fwd EY4.12%
FCF(TTM)1.66
FCFY2.83%
OCF(TTM)4.24
OCFY7.22%
SpS8.83
BVpS10.23
TBVpS4.4
PEG (NY)1.68
PEG (5Y)2.48
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.15% | ||
| ROE | 18.27% | ||
| ROCE | 7.02% | ||
| ROIC | 5.43% | ||
| ROICexc | 5.44% | ||
| ROICexgc | 6.37% | ||
| OM | 31.69% | ||
| PM (TTM) | 21.16% | ||
| GM | 79.31% | ||
| FCFM | 18.8% |
ROA(3y)4.78%
ROA(5y)3.6%
ROE(3y)20.43%
ROE(5y)15.26%
ROIC(3y)5.82%
ROIC(5y)5.41%
ROICexc(3y)5.94%
ROICexc(5y)5.53%
ROICexgc(3y)7.08%
ROICexgc(5y)6.64%
ROCE(3y)7.56%
ROCE(5y)7%
ROICexcg growth 3Y0.06%
ROICexcg growth 5Y2.22%
ROICexc growth 3Y1.49%
ROICexc growth 5Y3.34%
OM growth 3Y8.61%
OM growth 5Y1.79%
PM growth 3Y14.09%
PM growth 5Y15.42%
GM growth 3Y8.76%
GM growth 5Y1.31%
F-Score4
Asset Turnover0.2
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.96 | ||
| Debt/FCF | 13.52 | ||
| Debt/EBITDA | 4.31 | ||
| Cap/Depr | 139.45% | ||
| Cap/Sales | 29.18% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 91.2% | ||
| Profit Quality | 88.86% | ||
| Current Ratio | 0.4 | ||
| Quick Ratio | 0.36 | ||
| Altman-Z | 1.09 |
F-Score4
WACC8.2%
ROIC/WACC0.66
Cap/Depr(3y)119.42%
Cap/Depr(5y)100.01%
Cap/Sales(3y)23.28%
Cap/Sales(5y)19.62%
Profit Quality(3y)112.28%
Profit Quality(5y)316.57%
High Growth Momentum
Growth
EPS 1Y (TTM)-10%
EPS 3Y10.47%
EPS 5Y13.18%
EPS Q2Q%-3.39%
EPS Next Y19.42%
EPS Next 2Y15.31%
EPS Next 3Y14.78%
EPS Next 5Y13.84%
Revenue 1Y (TTM)1.73%
Revenue growth 3Y-0.39%
Revenue growth 5Y5.07%
Sales Q2Q%10%
Revenue Next Year16.54%
Revenue Next 2Y11.27%
Revenue Next 3Y10.89%
Revenue Next 5Y10.65%
EBIT growth 1Y-10.93%
EBIT growth 3Y8.18%
EBIT growth 5Y6.95%
EBIT Next Year83.03%
EBIT Next 3Y28.31%
EBIT Next 5Y20.1%
FCF growth 1Y-27.16%
FCF growth 3Y-5.24%
FCF growth 5Y8.26%
OCF growth 1Y-2.78%
OCF growth 3Y8.03%
OCF growth 5Y6.14%