WILLIAMS COS INC (WMB)

US9694571004 - Common Stock

53.49  +0.92 (+1.75%)

After market: 53.6 +0.11 (+0.21%)

Fundamental Rating

4

Overall WMB gets a fundamental rating of 4 out of 10. We evaluated WMB against 205 industry peers in the Oil, Gas & Consumable Fuels industry. WMB scores excellent on profitability, but there are concerns on its financial health. WMB has a expensive valuation and it also scores bad on growth.



7

1. Profitability

1.1 Basic Checks

In the past year WMB was profitable.
In the past year WMB had a positive cash flow from operations.
WMB had positive earnings in each of the past 5 years.
In the past 5 years WMB always reported a positive cash flow from operatings.

1.2 Ratios

WMB's Return On Assets of 5.34% is in line compared to the rest of the industry. WMB outperforms 50.49% of its industry peers.
WMB has a Return On Equity of 23.13%. This is in the better half of the industry: WMB outperforms 78.43% of its industry peers.
Looking at the Return On Invested Capital, with a value of 5.94%, WMB is in line with its industry, outperforming 41.18% of the companies in the same industry.
WMB had an Average Return On Invested Capital over the past 3 years of 5.86%. This is significantly below the industry average of 29.02%.
The 3 year average ROIC (5.86%) for WMB is below the current ROIC(5.94%), indicating increased profibility in the last year.
Industry RankSector 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

Looking at the Profit Margin, with a value of 27.26%, WMB is in the better half of the industry, outperforming 73.53% of the companies in the same industry.
In the last couple of years the Profit Margin of WMB has grown nicely.
With a decent Operating Margin value of 34.51%, WMB is doing good in the industry, outperforming 68.63% of the companies in the same industry.
WMB's Operating Margin has improved in the last couple of years.
WMB's Gross Margin of 81.56% is amongst the best of the industry. WMB outperforms 91.18% of its industry peers.
WMB's Gross Margin has improved in the last couple of years.
Industry RankSector 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%

1

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 1.00, we must say that WMB is in the distress zone and has some risk of bankruptcy.
WMB's Altman-Z score of 1.00 is on the low side compared to the rest of the industry. WMB is outperformed by 60.29% of its industry peers.
WMB has a debt to FCF ratio of 9.03. This is a negative value and a sign of low solvency as WMB would need 9.03 years to pay back of all of its debts.
WMB's Debt to FCF ratio of 9.03 is in line compared to the rest of the industry. WMB outperforms 47.06% of its industry peers.
A Debt/Equity ratio of 2.00 is on the high side and indicates that WMB has dependencies on debt financing.
The Debt to Equity ratio of WMB (2.00) is worse than 84.80% of its industry peers.
Industry RankSector Rank
Debt/Equity 2
Debt/FCF 9.03
Altman-Z 1
ROIC/WACC0.76
WACC7.87%

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.
WMB has a Current ratio of 0.57. This is amonst the worse of the industry: WMB underperforms 83.82% of its industry peers.
WMB has a Quick 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.
WMB has a worse Quick ratio (0.51) than 83.33% of its industry peers.
Industry RankSector Rank
Current Ratio 0.57
Quick Ratio 0.51

3

3. Growth

3.1 Past

WMB shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -15.18%.
WMB shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 26.12% yearly.
Looking at the last year, WMB shows a decrease in Revenue. The Revenue has decreased by -4.61% in the last year.
Measured over the past years, WMB shows a small growth in Revenue. The Revenue has been growing by 4.66% on average per year.
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.
The Revenue is expected to grow by 4.34% on average over the next years.
EPS Next Y-12.28%
EPS Next 2Y-1.33%
EPS Next 3Y2.89%
EPS Next 5Y6.18%
Revenue Next Year-4.51%
Revenue Next 2Y3.02%
Revenue Next 3Y4.91%
Revenue Next 5Y4.34%

3.3 Evolution

The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.

2

4. Valuation

4.1 Price/Earnings Ratio

WMB is valuated quite expensively with a Price/Earnings ratio of 28.15.
Compared to the rest of the industry, the Price/Earnings ratio of WMB indicates a slightly more expensive valuation: WMB is more expensive than 69.61% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 27.73. WMB is around the same levels.
The Price/Forward Earnings ratio is 25.32, which means the current valuation is very expensive for WMB.
Based on the Price/Forward Earnings ratio, WMB is valued a bit more expensive than the industry average as 68.14% of the companies are valued more cheaply.
When comparing the Price/Forward Earnings ratio of WMB to the average of the S&P500 Index (22.83), we can say WMB is valued inline with the index average.
Industry RankSector Rank
PE 28.15
Fwd PE 25.32

4.2 Price Multiples

WMB's Enterprise Value to EBITDA ratio is a bit more expensive when compared to the industry. WMB is more expensive than 75.00% of the companies in the same industry.
WMB's Price/Free Cash Flow ratio is in line with the industry average.
Industry RankSector Rank
P/FCF 21.72
EV/EBITDA 15.73

4.3 Compensation for Growth

The decent profitability rating of WMB may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.08
EPS Next 2Y-1.33%
EPS Next 3Y2.89%

5

5. Dividend

5.1 Amount

WMB has a Yearly Dividend Yield of 3.61%.
Compared to an average industry Dividend Yield of 7.08, WMB has a dividend in line with its industry peers.
WMB's Dividend Yield is rather good when compared to the S&P500 average which is at 2.34.
Industry RankSector Rank
Dividend Yield 3.61%

5.2 History

The dividend of WMB has a limited annual growth rate of 5.62%.
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)5.62%
Div Incr Years7
Div Non Decr Years7

5.3 Sustainability

WMB pays out 79.37% of its income as dividend. This is not a sustainable payout ratio.
The dividend of WMB is growing around the same rate as the earnings are growing. If this keeps up the dividend growth is sustainable.
DP79.37%
EPS Next 2Y-1.33%
EPS Next 3Y2.89%

WILLIAMS COS INC

NYSE:WMB (12/20/2024, 8:04:00 PM)

After market: 53.6 +0.11 (+0.21%)

53.49

+0.92 (+1.75%)

Chartmill FA Rating
GICS SectorEnergy
GICS IndustryGroupEnergy
GICS IndustryOil, Gas & Consumable Fuels
Earnings (Last)11-06 2024-11-06/amc
Earnings (Next)02-12 2025-02-12/amc
Inst Owners88.37%
Inst Owner Change1.21%
Ins Owners0.43%
Ins Owner Change-0.15%
Market Cap65.20B
Analysts74.4
Price Target56.9 (6.38%)
Short Float %1.2%
Short Ratio2.21
Dividend
Industry RankSector Rank
Dividend Yield 3.61%
Dividend Growth(5Y)5.62%
DP79.37%
Div Incr Years7
Div Non Decr Years7
Ex-Date12-13 2024-12-13 (0.475)
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)16.73%
PT rev (3m)22.87%
EPS NQ rev (1m)0.21%
EPS NQ rev (3m)-0.98%
EPS NY rev (1m)3.09%
EPS NY rev (3m)3.84%
Revenue NQ rev (1m)0.07%
Revenue NQ rev (3m)3.98%
Revenue NY rev (1m)1.39%
Revenue NY rev (3m)2.29%
Valuation
Industry RankSector Rank
PE 28.15
Fwd PE 25.32
P/S 6.18
P/FCF 21.72
P/OCF 11.71
P/B 5.25
P/tB 12.73
EV/EBITDA 15.73
EPS(TTM)1.9
EY3.55%
EPS(NY)2.11
Fwd EY3.95%
FCF(TTM)2.46
FCFY4.6%
OCF(TTM)4.57
OCFY8.54%
SpS8.65
BVpS10.2
TBVpS4.2
PEG (NY)N/A
PEG (5Y)1.08
Profitability
Industry RankSector 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 RankSector 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
F-Score5
WACC7.87%
ROIC/WACC0.76
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-4.51%
Revenue Next 2Y3.02%
Revenue Next 3Y4.91%
Revenue Next 5Y4.34%
EBIT growth 1Y-12.96%
EBIT growth 3Y17.66%
EBIT growth 5Y16.23%
EBIT Next Year52.49%
EBIT Next 3Y19.8%
EBIT Next 5Y14.29%
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%