WILLIAMS COS INC (WMB) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:WMB - US9694571004 - Common Stock
64.96 USD
+1.24 (+1.95%)
65.1628 USD
+0.2 (+0.31%)
We assign a fundamental rating of 5 out of 10 to WMB. WMB was compared to 207 industry peers in the Oil, Gas & Consumable Fuels industry. While WMB has a great profitability rating, there are quite some concerns on its financial health. 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.
- Each year in the past 5 years WMB had a positive operating cash flow.
1.2 Ratios
- The Return On Assets of WMB (4.25%) is better than 60.39% of its industry peers.
- WMB has a better Return On Equity (18.91%) than 86.47% of its industry peers.
- WMB has a Return On Invested Capital of 6.06%. This is comparable to the rest of the industry: WMB outperforms 54.11% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for WMB is significantly below the industry average of 21.94%.
- The 3 year average ROIC (5.82%) for WMB is below the current ROIC(6.06%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.25% | ||
| ROE | 18.91% | ||
| ROIC | 6.06% |
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 Profit Margin of 20.59%. This is in the better half of the industry: WMB outperforms 76.33% of its industry peers.
- In the last couple of years the Profit Margin of WMB has grown nicely.
- With an excellent Operating Margin value of 34.18%, WMB belongs to the best of the industry, outperforming 81.64% of the companies in the same industry.
- In the last couple of years the Operating Margin of WMB has grown nicely.
- WMB has a better Gross Margin (80.62%) than 90.34% of its industry peers.
- WMB's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 34.18% | ||
| PM (TTM) | 20.59% | ||
| GM | 80.62% |
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.
- Compared to 5 years ago, WMB has more shares outstanding
- WMB has a better debt/assets ratio than last year.
2.2 Solvency
- WMB has an Altman-Z score of 1.16. This is a bad value and indicates that WMB is not financially healthy and even has some risk of bankruptcy.
- The Altman-Z score of WMB (1.16) is comparable to the rest of the industry.
- WMB has a debt to FCF ratio of 16.25. This is a negative value and a sign of low solvency as WMB would need 16.25 years to pay back of all of its debts.
- With a Debt to FCF ratio value of 16.25, WMB perfoms like the industry average, outperforming 47.34% of the companies in the same industry.
- WMB has a Debt/Equity ratio of 2.06. This is a high value indicating a heavy dependency on external financing.
- WMB has a worse Debt to Equity ratio (2.06) than 79.71% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.06 | ||
| Debt/FCF | 16.25 | ||
| Altman-Z | 1.16 |
ROIC/WACC0.75
WACC8.04%
2.3 Liquidity
- WMB has a Current Ratio of 0.42. 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 0.42. This is amonst the worse of the industry: WMB underperforms 87.44% of its industry peers.
- WMB has a Quick Ratio of 0.42. 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 Quick ratio, with a value of 0.36, WMB is doing worse than 87.44% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.42 | ||
| Quick Ratio | 0.36 |
3. Growth
3.1 Past
- The Earnings Per Share has been growing slightly by 2.63% over the past year.
- The Earnings Per Share has been growing by 13.18% on average over the past years. This is quite good.
- WMB shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 9.02%.
- WMB shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 5.07% yearly.
EPS 1Y (TTM)2.63%
EPS 3Y10.47%
EPS 5Y13.18%
EPS Q2Q%32.5%
Revenue 1Y (TTM)9.02%
Revenue growth 3Y-0.39%
Revenue growth 5Y5.07%
Sales Q2Q%10.18%
3.2 Future
- The Earnings Per Share is expected to grow by 14.60% on average over the next years. This is quite good.
- The Revenue is expected to grow by 8.33% on average over the next years. This is quite good.
EPS Next Y17.19%
EPS Next 2Y12.97%
EPS Next 3Y13.79%
EPS Next 5Y14.6%
Revenue Next Year12.79%
Revenue Next 2Y8.97%
Revenue Next 3Y9.64%
Revenue Next 5Y8.33%
3.3 Evolution
- The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
- 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
- WMB is valuated quite expensively with a Price/Earnings ratio of 33.31.
- Compared to the rest of the industry, the Price/Earnings ratio of WMB indicates a slightly more expensive valuation: WMB is more expensive than 62.32% of the companies listed in the same industry.
- When comparing the Price/Earnings ratio of WMB to the average of the S&P500 Index (27.21), we can say WMB is valued slightly more expensively.
- With a Price/Forward Earnings ratio of 27.97, WMB can be considered very expensive at the moment.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of WMB is on the same level as its industry peers.
- Compared to an average S&P500 Price/Forward Earnings ratio of 25.98, WMB is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 33.31 | ||
| Fwd PE | 27.97 |
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 68.60% of the companies in the same industry.
- WMB's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 46.07 | ||
| EV/EBITDA | 17.14 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- The excellent profitability rating of WMB may justify a higher PE ratio.
- WMB's earnings are expected to grow with 13.79% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.94
PEG (5Y)2.53
EPS Next 2Y12.97%
EPS Next 3Y13.79%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 3.25%, WMB has a reasonable but not impressive dividend return.
- WMB's Dividend Yield is comparable with the industry average which is at 3.73.
- Compared to an average S&P500 Dividend Yield of 1.81, WMB pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.25% |
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
- WMB pays out 101.86% 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.
DP101.86%
EPS Next 2Y12.97%
EPS Next 3Y13.79%
WILLIAMS COS INC / WMB FAQ
What is the fundamental rating for WMB stock?
ChartMill assigns a fundamental rating of 5 / 10 to WMB.
Can you provide the valuation status for WILLIAMS COS INC?
ChartMill assigns a valuation rating of 2 / 10 to WILLIAMS COS INC (WMB). This can be considered as Overvalued.
How profitable is WILLIAMS COS INC (WMB) stock?
WILLIAMS COS INC (WMB) has a profitability rating of 8 / 10.
What is the expected EPS growth for WILLIAMS COS INC (WMB) stock?
The Earnings per Share (EPS) of WILLIAMS COS INC (WMB) is expected to grow by 17.19% in the next year.
Is the dividend of WILLIAMS COS INC sustainable?
The dividend rating of WILLIAMS COS INC (WMB) is 5 / 10 and the dividend payout ratio is 101.86%.