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 213 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 valied quite expensively at the moment, while 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.
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
Looking at the Return On Assets, with a value of 4.15%, WMB is in line with its industry, outperforming 54.93% of the companies in the same industry.
WMB has a better Return On Equity (18.27%) than 78.87% of its industry peers.
WMB has a Return On Invested Capital (5.43%) which is comparable to the rest of the industry.
Measured over the past 3 years, the Average Return On Invested Capital for WMB is significantly below the industry average of 25.88%.
| 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 has a better Profit Margin (21.16%) than 73.24% of its industry peers.
In the last couple of years the Profit Margin of WMB has grown nicely.
Looking at the Operating Margin, with a value of 31.69%, WMB is in the better half of the industry, outperforming 70.89% of the companies in the same industry.
In the last couple of years the Operating Margin of WMB has grown nicely.
WMB's Gross Margin of 79.31% is amongst the best of the industry. WMB outperforms 89.20% of its industry peers.
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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), WMB is destroying value.
The number of shares outstanding for WMB remains at a similar level compared to 1 year ago.
The number of shares outstanding for WMB has been increased compared to 5 years ago.
Compared to 1 year ago, WMB has an improved debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 1.02, we must say that WMB is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of WMB (1.02) is comparable to the rest of the industry.
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's Debt to FCF ratio of 13.52 is in line compared to the rest of the industry. WMB outperforms 48.83% of its industry peers.
A Debt/Equity ratio of 1.96 is on the high side and indicates that WMB has dependencies on debt financing.
WMB's Debt to Equity ratio of 1.96 is on the low side compared to the rest of the industry. WMB is outperformed by 81.22% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.96 | ||
| Debt/FCF | 13.52 | ||
| Altman-Z | 1.02 |
ROIC/WACC0.55
WACC9.82%
2.3 Liquidity
A Current Ratio of 0.40 indicates that WMB may have some problems paying its short term obligations.
WMB has a worse Current ratio (0.40) than 88.73% of its industry peers.
A Quick Ratio of 0.36 indicates that WMB may have some problems paying its short term obligations.
With a Quick ratio value of 0.36, WMB is not doing good in the industry: 89.20% of the companies in the same industry are doing better.
| 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.
WMB shows a small growth in Revenue. In the last year, the Revenue has grown by 1.73%.
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 11.89% yearly.
The Revenue is expected to grow by 10.65% on average over the next years. This is quite good.
EPS Next Y19.57%
EPS Next 2Y15.47%
EPS Next 3Y14.48%
EPS Next 5Y11.89%
Revenue Next Year13.85%
Revenue Next 2Y12.15%
Revenue Next 3Y10.6%
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
A Price/Earnings ratio of 32.65 indicates a quite expensive valuation of WMB.
Based on the Price/Earnings ratio, WMB is valued a bit more expensive than 63.85% of the companies in the same industry.
WMB's Price/Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 26.60.
Based on the Price/Forward Earnings ratio of 24.22, the valuation of WMB can be described as rather expensive.
WMB's Price/Forward Earnings ratio is a bit more expensive when compared to the industry. WMB is more expensive than 61.03% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of WMB to the average of the S&P500 Index (22.43), we can say WMB is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.65 | ||
| Fwd PE | 24.22 |
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 66.67% of the companies in the same industry.
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 | 35.39 | ||
| EV/EBITDA | 17.41 |
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 14.48% in the coming years.
PEG (NY)1.67
PEG (5Y)2.48
EPS Next 2Y15.47%
EPS Next 3Y14.48%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.40%, WMB has a reasonable but not impressive dividend return.
WMB's Dividend Yield is comparable with the industry average which is at 7.05.
Compared to an average S&P500 Dividend Yield of 2.36, WMB pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.4% |
5.2 History
The dividend of WMB has a limited annual growth rate of 4.57%.
WMB has paid a dividend for at least 10 years, which is 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 102.89% of its income as dividend. This is not a sustainable payout ratio.
WMB's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP102.89%
EPS Next 2Y15.47%
EPS Next 3Y14.48%
58.77
+0.23 (+0.39%)
Chartmill FA Rating
GICS SectorEnergy
GICS IndustryGroupEnergy
GICS IndustryOil, Gas & Consumable Fuels
Earnings (Last)
Earnings (Next)
Inst Owners87.44%
Inst Owner Change1.71%
Ins Owners0.42%
Ins Owner Change0.45%
Market Cap71.74B
Analysts74.07
Price Target61.6 (4.82%)
Short Float %1.62%
Short Ratio2.53
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.4% |
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)0.26%
PT rev (3m)4.31%
EPS NQ rev (1m)-0.76%
EPS NQ rev (3m)3.9%
EPS NY rev (1m)1.62%
EPS NY rev (3m)3.44%
Revenue NQ rev (1m)2.62%
Revenue NQ rev (3m)4.88%
Revenue NY rev (1m)1.03%
Revenue NY rev (3m)2.15%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.65 | ||
| Fwd PE | 24.22 | ||
| P/S | 6.65 | ||
| P/FCF | 35.39 | ||
| P/OCF | 13.87 | ||
| P/B | 5.75 | ||
| P/tB | 13.35 | ||
| EV/EBITDA | 17.41 |
EPS(TTM)1.8
EY3.06%
EPS(NY)2.43
Fwd EY4.13%
FCF(TTM)1.66
FCFY2.83%
OCF(TTM)4.24
OCFY7.21%
SpS8.83
BVpS10.23
TBVpS4.4
PEG (NY)1.67
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 | 1.02 |
F-Score4
WACC9.82%
ROIC/WACC0.55
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 Y19.57%
EPS Next 2Y15.47%
EPS Next 3Y14.48%
EPS Next 5Y11.89%
Revenue 1Y (TTM)1.73%
Revenue growth 3Y-0.39%
Revenue growth 5Y5.07%
Sales Q2Q%10%
Revenue Next Year13.85%
Revenue Next 2Y12.15%
Revenue Next 3Y10.6%
Revenue Next 5Y10.65%
EBIT growth 1Y-10.93%
EBIT growth 3Y8.18%
EBIT growth 5Y6.95%
EBIT Next Year81.44%
EBIT Next 3Y27.93%
EBIT Next 5Y18.57%
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%