WILLIAMS COS INC (WMB) Stock Fundamental Analysis
NYSE:WMB - New York Stock Exchange, Inc. - US9694571004 - Common Stock
We assign a fundamental rating of 4 out of 10 to WMB. WMB was compared to 210 industry peers in the Oil, Gas & Consumable Fuels industry. While WMB belongs to the best of the industry regarding profitability, there are concerns on its financial health. WMB has a expensive valuation and it also scores bad on growth.
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.
Each year in the past 5 years WMB has been profitable.
WMB had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
WMB has a Return On Assets of 5.34%. This is comparable to the rest of the industry: WMB outperforms 51.46% of its industry peers.
The Return On Equity of WMB (23.13%) is better than 78.64% of its industry peers.
WMB has a Return On Invested Capital (5.94%) which is in line with its industry peers.
The Average Return On Invested Capital over the past 3 years for WMB is significantly below the industry average of 28.71%.
The 3 year average ROIC (5.86%) for WMB is below the current ROIC(5.94%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.34% | ||
| ROE | 23.13% | ||
| ROIC | 5.94% |
ROA(3y)4.48%
ROA(5y)3.15%
ROE(3y)18.89%
ROE(5y)12.96%
ROIC(3y)5.86%
ROIC(5y)5.41%
1.3 Margins
WMB has a better Profit Margin (27.26%) than 74.76% of its industry peers.
WMB's Profit Margin has improved in the last couple of years.
WMB has a better Operating Margin (34.51%) than 69.90% of its industry peers.
In the last couple of years the Operating Margin of WMB has grown nicely.
With an excellent Gross Margin value of 81.56%, WMB belongs to the best of the industry, outperforming 91.26% of the companies in the same industry.
WMB's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 34.51% | ||
| PM (TTM) | 27.26% | ||
| GM | 81.56% |
OM growth 3Y4.85%
OM growth 5Y11.06%
PM growth 3Y121.08%
PM growth 5YN/A
GM growth 3Y0.93%
GM growth 5Y3.88%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so WMB is destroying value.
WMB has about the same amout of shares outstanding than it did 1 year ago.
The number of shares outstanding for WMB has been increased compared to 5 years ago.
The debt/assets ratio for WMB is higher compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 1.13, we must say that WMB is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of WMB (1.13) is comparable to the rest of the industry.
The Debt to FCF ratio of WMB is 9.03, which is on the high side as it means it would take WMB, 9.03 years of fcf income to pay off all of its debts.
With a Debt to FCF ratio value of 9.03, WMB perfoms like the industry average, outperforming 46.60% of the companies in the same industry.
A Debt/Equity ratio of 2.00 is on the high side and indicates that WMB has dependencies on debt financing.
WMB has a Debt to Equity ratio of 2.00. This is amonst the worse of the industry: WMB underperforms 84.95% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2 | ||
| Debt/FCF | 9.03 | ||
| Altman-Z | 1.13 |
ROIC/WACC0.73
WACC8.13%
2.3 Liquidity
WMB has a Current Ratio of 0.57. This is a bad value and indicates that WMB is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 0.57, WMB is doing worse than 84.95% of the companies in the same industry.
A Quick Ratio of 0.51 indicates that WMB may have some problems paying its short term obligations.
WMB's Quick ratio of 0.51 is on the low side compared to the rest of the industry. WMB is outperformed by 83.98% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.57 | ||
| Quick Ratio | 0.51 |
3. Growth
3.1 Past
The earnings per share for WMB have decreased strongly by -15.18% in the last year.
Measured over the past years, WMB shows a very strong growth in Earnings Per Share. The EPS has been growing by 26.12% on average per year.
Looking at the last year, WMB shows a decrease in Revenue. The Revenue has decreased by -4.61% in the last year.
The Revenue has been growing slightly by 4.66% on average over the past years.
EPS 1Y (TTM)-15.18%
EPS 3Y36.67%
EPS 5Y26.12%
EPS Q2Q%-16.67%
Revenue 1Y (TTM)-4.61%
Revenue growth 3Y12.21%
Revenue growth 5Y4.66%
Sales Q2Q%3.67%
3.2 Future
Based on estimates for the next years, WMB will show a small growth in Earnings Per Share. The EPS will grow by 6.18% on average per year.
WMB is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.34% yearly.
EPS Next Y-12.28%
EPS Next 2Y-1.33%
EPS Next 3Y2.89%
EPS Next 5Y6.18%
Revenue Next Year-4.52%
Revenue Next 2Y3.04%
Revenue Next 3Y4.93%
Revenue Next 5Y4.34%
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 decreasing.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 31.16 indicates a quite expensive valuation of WMB.
67.48% of the companies in the same industry are cheaper than WMB, based on the Price/Earnings ratio.
The average S&P500 Price/Earnings ratio is at 28.19. WMB is around the same levels.
The Price/Forward Earnings ratio is 28.02, which means the current valuation is very expensive for WMB.
WMB's Price/Forward Earnings ratio is a bit more expensive when compared to the industry. WMB is more expensive than 68.93% of the companies in the same industry.
WMB is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 24.37, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.16 | ||
| Fwd PE | 28.02 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, WMB is valued a bit more expensive than 73.79% of the companies in the same industry.
WMB's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 24.04 | ||
| EV/EBITDA | 17.22 |
4.3 Compensation for Growth
The decent profitability rating of WMB may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.19
EPS Next 2Y-1.33%
EPS Next 3Y2.89%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.21%, WMB has a reasonable but not impressive dividend return.
WMB's Dividend Yield is comparable with the industry average which is at 6.39.
Compared to an average S&P500 Dividend Yield of 2.28, WMB pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.21% |
5.2 History
The dividend of WMB has a limited annual growth rate of 5.62%.
WMB has paid a dividend for at least 10 years, which is a reliable track record.
As WMB did not decrease their dividend in the past 5 years, we can say the dividend looks stable.
Dividend Growth(5Y)5.62%
Div Incr Years7
Div Non Decr Years7
5.3 Sustainability
79.37% of the earnings are spent on dividend by WMB. This is not a sustainable payout ratio.
WMB's earnings are growing around the same pace than its dividend. As long as the earnings growth is kept the dividend growth is sustainable.
DP79.37%
EPS Next 2Y-1.33%
EPS Next 3Y2.89%
WILLIAMS COS INC
NYSE:WMB (1/22/2025, 5:48:18 PM)
After market: 59.4 +0.2 (+0.34%)59.2
-1.43 (-2.36%)
Chartmill FA Rating
GICS SectorEnergy
GICS IndustryGroupEnergy
GICS IndustryOil, Gas & Consumable Fuels
Earnings (Last)
Earnings (Next)
Inst Owners88.37%
Inst Owner Change0.02%
Ins Owners0.43%
Ins Owner Change-0.16%
Market Cap72.17B
Analysts74.4
Price Target58.09 (-1.87%)
Short Float %1.47%
Short Ratio2.62
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.21% |
Yearly Dividend1.79
Dividend Growth(5Y)5.62%
DP79.37%
Div Incr Years7
Div Non Decr Years7
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)2.67%
Min EPS beat(2)-5.05%
Max EPS beat(2)10.38%
EPS beat(4)3
Avg EPS beat(4)7.26%
Min EPS beat(4)-5.05%
Max EPS beat(4)20.67%
EPS beat(8)7
Avg EPS beat(8)17%
EPS beat(12)10
Avg EPS beat(12)13.67%
EPS beat(16)12
Avg EPS beat(16)7.88%
Revenue beat(2)2
Avg Revenue beat(2)2.28%
Min Revenue beat(2)0.49%
Max Revenue beat(2)4.08%
Revenue beat(4)3
Avg Revenue beat(4)-0.19%
Min Revenue beat(4)-7.41%
Max Revenue beat(4)4.08%
Revenue beat(8)4
Avg Revenue beat(8)0.43%
Revenue beat(12)6
Avg Revenue beat(12)2.72%
Revenue beat(16)10
Avg Revenue beat(16)6.32%
PT rev (1m)2.09%
PT rev (3m)24.53%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-0.98%
EPS NY rev (1m)0%
EPS NY rev (3m)3.84%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)3.98%
Revenue NY rev (1m)-0.01%
Revenue NY rev (3m)2.37%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.16 | ||
| Fwd PE | 28.02 | ||
| P/S | 6.84 | ||
| P/FCF | 24.04 | ||
| P/OCF | 12.96 | ||
| P/B | 5.81 | ||
| P/tB | 14.09 | ||
| EV/EBITDA | 17.22 |
EPS(TTM)1.9
EY3.21%
EPS(NY)2.11
Fwd EY3.57%
FCF(TTM)2.46
FCFY4.16%
OCF(TTM)4.57
OCFY7.72%
SpS8.65
BVpS10.2
TBVpS4.2
PEG (NY)N/A
PEG (5Y)1.19
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.34% | ||
| ROE | 23.13% | ||
| ROCE | 7.41% | ||
| ROIC | 5.94% | ||
| ROICexc | 6.04% | ||
| ROICexgc | 7.11% | ||
| OM | 34.51% | ||
| PM (TTM) | 27.26% | ||
| GM | 81.56% | ||
| FCFM | 28.47% |
ROA(3y)4.48%
ROA(5y)3.15%
ROE(3y)18.89%
ROE(5y)12.96%
ROIC(3y)5.86%
ROIC(5y)5.41%
ROICexc(3y)6.04%
ROICexc(5y)5.53%
ROICexgc(3y)7.29%
ROICexgc(5y)6.71%
ROCE(3y)7.36%
ROCE(5y)6.78%
ROICexcg growth 3Y13.89%
ROICexcg growth 5Y14.83%
ROICexc growth 3Y14.4%
ROICexc growth 5Y15.16%
OM growth 3Y4.85%
OM growth 5Y11.06%
PM growth 3Y121.08%
PM growth 5YN/A
GM growth 3Y0.93%
GM growth 5Y3.88%
F-Score5
Asset Turnover0.2
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2 | ||
| Debt/FCF | 9.03 | ||
| Debt/EBITDA | 4.26 | ||
| Cap/Depr | 117.59% | ||
| Cap/Sales | 24.35% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 95.65% | ||
| Profit Quality | 104.45% | ||
| Current Ratio | 0.57 | ||
| Quick Ratio | 0.51 | ||
| Altman-Z | 1.13 |
F-Score5
WACC8.13%
ROIC/WACC0.73
Cap/Depr(3y)101.76%
Cap/Depr(5y)100.95%
Cap/Sales(3y)18.7%
Cap/Sales(5y)19.76%
Profit Quality(3y)137.24%
Profit Quality(5y)332.36%
High Growth Momentum
Growth
EPS 1Y (TTM)-15.18%
EPS 3Y36.67%
EPS 5Y26.12%
EPS Q2Q%-16.67%
EPS Next Y-12.28%
EPS Next 2Y-1.33%
EPS Next 3Y2.89%
EPS Next 5Y6.18%
Revenue 1Y (TTM)-4.61%
Revenue growth 3Y12.21%
Revenue growth 5Y4.66%
Sales Q2Q%3.67%
Revenue Next Year-4.52%
Revenue Next 2Y3.04%
Revenue Next 3Y4.93%
Revenue Next 5Y4.34%
EBIT growth 1Y-12.96%
EBIT growth 3Y17.66%
EBIT growth 5Y16.23%
EBIT Next Year56.99%
EBIT Next 3Y20.79%
EBIT Next 5Y14.77%
FCF growth 1Y-1.67%
FCF growth 3Y14.92%
FCF growth 5Y157.12%
OCF growth 1Y15.8%
OCF growth 3Y19.31%
OCF growth 5Y12.51%