WILLIAMS COS INC (WMB) Stock Fundamental Analysis
NYSE:WMB - New York Stock Exchange, Inc. - US9694571004 - Common Stock - Currency: USD
Overall WMB gets a fundamental rating of 4 out of 10. We evaluated WMB against 211 industry peers in the Oil, Gas & Consumable Fuels industry. There are concerns on the financial health of WMB while its profitability can be described as average. WMB is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year WMB was profitable.
WMB had a positive operating cash flow in the past year.
Each year in the past 5 years WMB has been profitable.
Each year in the past 5 years WMB had a positive operating cash flow.
1.2 Ratios
With a Return On Assets value of 4.08%, WMB perfoms like the industry average, outperforming 42.65% of the companies in the same industry.
With a decent Return On Equity value of 17.87%, WMB is doing good in the industry, outperforming 69.12% of the companies in the same industry.
The Return On Invested Capital of WMB (5.26%) is worse than 61.76% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for WMB is significantly below the industry average of 28.75%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.08% | ||
| ROE | 17.87% | ||
| ROIC | 5.26% |
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 has a better Profit Margin (21.16%) than 68.14% of its industry peers.
WMB's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 31.92%, WMB is in the better half of the industry, outperforming 67.65% of the companies in the same industry.
WMB's Operating Margin has improved in the last couple of years.
WMB has a better Gross Margin (79.83%) than 89.71% of its industry peers.
In the last couple of years the Gross Margin of WMB has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 31.92% | ||
| PM (TTM) | 21.16% | ||
| GM | 79.83% |
OM growth 3Y8.6%
OM growth 5Y1.78%
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.
The number of shares outstanding for WMB remains at a similar level compared to 1 year ago.
Compared to 5 years ago, WMB has more shares outstanding
WMB has a better debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 1.04, we must say that WMB is in the distress zone and has some risk of bankruptcy.
With a Altman-Z score value of 1.04, WMB perfoms like the industry average, outperforming 40.69% of the companies in the same industry.
The Debt to FCF ratio of WMB is 11.72, which is on the high side as it means it would take WMB, 11.72 years of fcf income to pay off all of its debts.
With a Debt to FCF ratio value of 11.72, WMB perfoms like the industry average, outperforming 42.65% of the companies in the same industry.
WMB has a Debt/Equity ratio of 2.03. This is a high value indicating a heavy dependency on external financing.
WMB has a Debt to Equity ratio of 2.03. This is amonst the worse of the industry: WMB underperforms 85.29% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.03 | ||
| Debt/FCF | 11.72 | ||
| Altman-Z | 1.04 |
ROIC/WACC0.64
WACC8.19%
2.3 Liquidity
WMB has a Current Ratio of 0.50. This is a bad value and indicates that WMB is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Current ratio value of 0.50, WMB is not doing good in the industry: 87.75% of the companies in the same industry are doing better.
A Quick Ratio of 0.45 indicates that WMB may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.45, WMB is doing worse than 88.24% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.5 | ||
| Quick Ratio | 0.45 |
3. Growth
3.1 Past
WMB shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -16.13%.
The Earnings Per Share has been growing by 13.18% on average over the past years. This is quite good.
The Revenue has decreased by -3.70% in the past year.
The Revenue has been growing slightly by 5.07% on average over the past years.
EPS 1Y (TTM)-16.13%
EPS 3Y10.47%
EPS 5Y13.18%
EPS Q2Q%-16.67%
Revenue 1Y (TTM)-3.7%
Revenue growth 3Y-0.39%
Revenue growth 5Y5.07%
Sales Q2Q%10.92%
3.2 Future
The Earnings Per Share is expected to grow by 11.46% on average over the next years. This is quite good.
Based on estimates for the next years, WMB will show a small growth in Revenue. The Revenue will grow by 6.78% on average per year.
EPS Next Y15.61%
EPS Next 2Y13.85%
EPS Next 3Y12.35%
EPS Next 5Y11.46%
Revenue Next Year12.65%
Revenue Next 2Y10.49%
Revenue Next 3Y7.15%
Revenue Next 5Y6.78%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 31.56, WMB can be considered very expensive at the moment.
Compared to the rest of the industry, the Price/Earnings ratio of WMB indicates a slightly more expensive valuation: WMB is more expensive than 67.65% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of WMB to the average of the S&P500 Index (29.63), we can say WMB is valued inline with the index average.
With a Price/Forward Earnings ratio of 27.30, WMB can be considered very expensive at the moment.
Based on the Price/Forward Earnings ratio, WMB is valued a bit more expensive than 66.67% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 22.68. WMB is valued slightly more expensive when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.56 | ||
| Fwd PE | 27.3 |
4.2 Price Multiples
72.06% of the companies in the same industry are cheaper than WMB, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of WMB is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 30.5 | ||
| EV/EBITDA | 17.52 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive 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 12.35% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.02
PEG (5Y)2.39
EPS Next 2Y13.85%
EPS Next 3Y12.35%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.42%, WMB has a reasonable but not impressive dividend return.
WMB's Dividend Yield is comparable with the industry average which is at 6.75.
WMB's Dividend Yield is a higher than the S&P500 average which is at 2.29.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.42% |
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
WMB pays out 104.23% of its income as dividend. This is not a sustainable payout ratio.
The dividend of WMB is growing, but earnings are growing more, so the dividend growth is sustainable.
DP104.23%
EPS Next 2Y13.85%
EPS Next 3Y12.35%
57.44
-1.01 (-1.73%)
Chartmill FA Rating
GICS SectorEnergy
GICS IndustryGroupEnergy
GICS IndustryOil, Gas & Consumable Fuels
Earnings (Last)
Earnings (Next)
Inst Owners87.44%
Inst Owner Change-0.36%
Ins Owners0.42%
Ins Owner Change-0.16%
Market Cap70.02B
Analysts73.85
Price Target60.01 (4.47%)
Short Float %1.43%
Short Ratio2.32
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.42% |
Yearly Dividend1.9
Dividend Growth(5Y)4.57%
DP104.23%
Div Incr Years7
Div Non Decr Years7
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-9.31%
Min EPS beat(2)-13.58%
Max EPS beat(2)-5.05%
EPS beat(4)2
Avg EPS beat(4)3.11%
Min EPS beat(4)-13.58%
Max EPS beat(4)20.67%
EPS beat(8)6
Avg EPS beat(8)13.82%
EPS beat(12)9
Avg EPS beat(12)11.44%
EPS beat(16)12
Avg EPS beat(16)11.47%
Revenue beat(2)2
Avg Revenue beat(2)2.67%
Min Revenue beat(2)1.26%
Max Revenue beat(2)4.08%
Revenue beat(4)4
Avg Revenue beat(4)1.98%
Min Revenue beat(4)0.49%
Max Revenue beat(4)4.08%
Revenue beat(8)5
Avg Revenue beat(8)0.86%
Revenue beat(12)6
Avg Revenue beat(12)-0.14%
Revenue beat(16)10
Avg Revenue beat(16)5.74%
PT rev (1m)1.66%
PT rev (3m)21.14%
EPS NQ rev (1m)-3.81%
EPS NQ rev (3m)-3.53%
EPS NY rev (1m)0.94%
EPS NY rev (3m)4.06%
Revenue NQ rev (1m)-1.28%
Revenue NQ rev (3m)-0.37%
Revenue NY rev (1m)-0.21%
Revenue NY rev (3m)1.17%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.56 | ||
| Fwd PE | 27.3 | ||
| P/S | 6.67 | ||
| P/FCF | 30.5 | ||
| P/OCF | 14.08 | ||
| P/B | 5.63 | ||
| P/tB | 13.4 | ||
| EV/EBITDA | 17.52 |
EPS(TTM)1.82
EY3.17%
EPS(NY)2.1
Fwd EY3.66%
FCF(TTM)1.88
FCFY3.28%
OCF(TTM)4.08
OCFY7.1%
SpS8.62
BVpS10.2
TBVpS4.29
PEG (NY)2.02
PEG (5Y)2.39
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.08% | ||
| ROE | 17.87% | ||
| ROCE | 6.82% | ||
| ROIC | 5.26% | ||
| ROICexc | 5.27% | ||
| ROICexgc | 6.16% | ||
| OM | 31.92% | ||
| PM (TTM) | 21.16% | ||
| GM | 79.83% | ||
| FCFM | 21.86% |
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 3Y0.07%
ROICexcg growth 5Y2.23%
ROICexc growth 3Y1.49%
ROICexc growth 5Y3.34%
OM growth 3Y8.6%
OM growth 5Y1.78%
PM growth 3Y14.09%
PM growth 5Y15.42%
GM growth 3Y8.76%
GM growth 5Y1.31%
F-Score3
Asset Turnover0.19
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.03 | ||
| Debt/FCF | 11.72 | ||
| Debt/EBITDA | 4.52 | ||
| Cap/Depr | 120.69% | ||
| Cap/Sales | 25.5% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 89.27% | ||
| Profit Quality | 103.33% | ||
| Current Ratio | 0.5 | ||
| Quick Ratio | 0.45 | ||
| Altman-Z | 1.04 |
F-Score3
WACC8.19%
ROIC/WACC0.64
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)-16.13%
EPS 3Y10.47%
EPS 5Y13.18%
EPS Q2Q%-16.67%
EPS Next Y15.61%
EPS Next 2Y13.85%
EPS Next 3Y12.35%
EPS Next 5Y11.46%
Revenue 1Y (TTM)-3.7%
Revenue growth 3Y-0.39%
Revenue growth 5Y5.07%
Sales Q2Q%10.92%
Revenue Next Year12.65%
Revenue Next 2Y10.49%
Revenue Next 3Y7.15%
Revenue Next 5Y6.78%
EBIT growth 1Y-19.94%
EBIT growth 3Y8.17%
EBIT growth 5Y6.94%
EBIT Next Year77.58%
EBIT Next 3Y25.31%
EBIT Next 5Y17.58%
FCF growth 1Y-31.89%
FCF growth 3Y-5.24%
FCF growth 5Y8.26%
OCF growth 1Y-16.23%
OCF growth 3Y8.03%
OCF growth 5Y6.14%