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 212 industry peers in the Oil, Gas & Consumable Fuels industry. WMB has a medium profitability rating, but doesn't score so well on its financial health evaluation. While showing a medium growth rate, WMB is valued expensive at the moment.
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.
WMB had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
WMB has a Return On Assets (4.07%) which is comparable to the rest of the industry.
With a decent Return On Equity value of 17.87%, WMB is doing good in the industry, outperforming 75.47% of the companies in the same industry.
With a Return On Invested Capital value of 5.24%, WMB perfoms like the industry average, outperforming 42.45% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for WMB is significantly below the industry average of 27.42%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.07% | ||
| ROE | 17.87% | ||
| ROIC | 5.24% |
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
The Profit Margin of WMB (21.16%) is better than 73.58% of its industry peers.
In the last couple of years the Profit Margin of WMB has grown nicely.
WMB has a Operating Margin of 31.80%. This is in the better half of the industry: WMB outperforms 67.92% of its industry peers.
In the last couple of years the Operating Margin of WMB has grown nicely.
WMB has a Gross Margin of 79.83%. This is amongst the best in the industry. WMB outperforms 89.15% 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 | 31.8% | ||
| PM (TTM) | 21.16% | ||
| GM | 79.83% |
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
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.
WMB has a better debt/assets ratio than last year.
2.2 Solvency
WMB has an Altman-Z score of 1.04. This is a bad value and indicates that WMB is not financially healthy and even has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 1.04, WMB is in line with its industry, outperforming 45.28% of the companies in the same industry.
WMB has a debt to FCF ratio of 11.72. This is a negative value and a sign of low solvency as WMB would need 11.72 years to pay back of all of its debts.
WMB has a Debt to FCF ratio of 11.72. This is comparable to the rest of the industry: WMB outperforms 48.11% of its industry peers.
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 82.08% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.03 | ||
| Debt/FCF | 11.72 | ||
| Altman-Z | 1.04 |
ROIC/WACC0.53
WACC9.83%
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.
WMB's Current ratio of 0.50 is on the low side compared to the rest of the industry. WMB is outperformed by 86.32% of its industry peers.
WMB has a Quick 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.
WMB has a Quick ratio of 0.45. This is amonst the worse of the industry: WMB underperforms 85.38% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.5 | ||
| Quick Ratio | 0.45 |
3. Growth
3.1 Past
The earnings per share for WMB have decreased strongly by -16.13% in the last year.
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.
WMB shows a decrease in Revenue. In the last year, the revenue decreased by -3.70%.
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 11.89% on average over the next years. This is quite good.
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 Y18.12%
EPS Next 2Y14.71%
EPS Next 3Y14.05%
EPS Next 5Y11.89%
Revenue Next Year12.69%
Revenue Next 2Y11.42%
Revenue Next 3Y10.03%
Revenue Next 5Y10.65%
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.
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
With a Price/Earnings ratio of 32.21, WMB can be considered very expensive at the moment.
Based on the Price/Earnings ratio, WMB is valued a bit more expensive than the industry average as 64.15% of the companies are valued more cheaply.
The average S&P500 Price/Earnings ratio is at 28.29. WMB is around the same levels.
Based on the Price/Forward Earnings ratio of 27.27, the valuation of WMB can be described as expensive.
63.21% of the companies in the same industry are cheaper than WMB, based on the Price/Forward Earnings ratio.
WMB is valuated rather expensively when we compare the Price/Forward Earnings ratio to 21.08, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.21 | ||
| Fwd PE | 27.27 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of WMB indicates a slightly more expensive valuation: WMB is more expensive than 69.34% of the companies listed 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 | 31.17 | ||
| EV/EBITDA | 17.62 |
4.3 Compensation for Growth
The 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.
A more expensive valuation may be justified as WMB's earnings are expected to grow with 14.05% in the coming years.
PEG (NY)1.78
PEG (5Y)2.44
EPS Next 2Y14.71%
EPS Next 3Y14.05%
5. Dividend
5.1 Amount
WMB has a Yearly Dividend Yield of 3.41%.
Compared to an average industry Dividend Yield of 7.82, WMB has a dividend in line with its industry peers.
WMB's Dividend Yield is a higher than the S&P500 average which is at 2.57.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.41% |
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.
As WMB did not decrease their dividend in the past 5 years, we can say the dividend looks stable.
Dividend Growth(5Y)4.57%
Div Incr Years7
Div Non Decr Years7
5.3 Sustainability
104.23% of the earnings are spent on dividend by WMB. This is not a sustainable payout ratio.
WMB's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP104.23%
EPS Next 2Y14.71%
EPS Next 3Y14.05%
58.62
+0.36 (+0.62%)
Chartmill FA Rating
GICS SectorEnergy
GICS IndustryGroupEnergy
GICS IndustryOil, Gas & Consumable Fuels
Earnings (Last)
Earnings (Next)
Inst Owners87.44%
Inst Owner Change0.02%
Ins Owners0.42%
Ins Owner Change0.2%
Market Cap71.56B
Analysts74.07
Price Target61.44 (4.81%)
Short Float %1.4%
Short Ratio2.16
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.41% |
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)2.14%
PT rev (3m)5.77%
EPS NQ rev (1m)3.74%
EPS NQ rev (3m)5.14%
EPS NY rev (1m)2.17%
EPS NY rev (3m)1.75%
Revenue NQ rev (1m)1.56%
Revenue NQ rev (3m)1.56%
Revenue NY rev (1m)0.87%
Revenue NY rev (3m)0.98%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.21 | ||
| Fwd PE | 27.27 | ||
| P/S | 6.81 | ||
| P/FCF | 31.17 | ||
| P/OCF | 14.39 | ||
| P/B | 5.75 | ||
| P/tB | 13.69 | ||
| EV/EBITDA | 17.62 |
EPS(TTM)1.82
EY3.1%
EPS(NY)2.15
Fwd EY3.67%
FCF(TTM)1.88
FCFY3.21%
OCF(TTM)4.07
OCFY6.95%
SpS8.6
BVpS10.19
TBVpS4.28
PEG (NY)1.78
PEG (5Y)2.44
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.07% | ||
| ROE | 17.87% | ||
| ROCE | 6.79% | ||
| ROIC | 5.24% | ||
| ROICexc | 5.24% | ||
| ROICexgc | 6.13% | ||
| OM | 31.8% | ||
| 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 3Y0.06%
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-Score3
Asset Turnover0.19
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.03 | ||
| Debt/FCF | 11.72 | ||
| Debt/EBITDA | 4.53 | ||
| Cap/Depr | 120.69% | ||
| Cap/Sales | 25.5% | ||
| Interest Coverage | 2.58 | ||
| Cash Conversion | 89.48% | ||
| Profit Quality | 103.33% | ||
| Current Ratio | 0.5 | ||
| Quick Ratio | 0.45 | ||
| Altman-Z | 1.04 |
F-Score3
WACC9.83%
ROIC/WACC0.53
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 Y18.12%
EPS Next 2Y14.71%
EPS Next 3Y14.05%
EPS Next 5Y11.89%
Revenue 1Y (TTM)-3.7%
Revenue growth 3Y-0.39%
Revenue growth 5Y5.07%
Sales Q2Q%10.92%
Revenue Next Year12.69%
Revenue Next 2Y11.42%
Revenue Next 3Y10.03%
Revenue Next 5Y10.65%
EBIT growth 1Y-20.25%
EBIT growth 3Y8.18%
EBIT growth 5Y6.95%
EBIT Next Year81.44%
EBIT Next 3Y27.93%
EBIT Next 5Y18.57%
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%