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 211 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. While showing a medium growth rate, WMB is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
WMB had positive earnings in the past year.
WMB had a positive operating cash flow in the past year.
Each year in the past 5 years WMB has been profitable.
In the past 5 years WMB always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of WMB (4.15%) is comparable to the rest of the industry.
WMB's Return On Equity of 18.27% is fine compared to the rest of the industry. WMB outperforms 78.67% of its industry peers.
Looking at the Return On Invested Capital, with a value of 5.43%, WMB is in line with its industry, outperforming 45.97% of the companies in the same industry.
WMB had an Average Return On Invested Capital over the past 3 years of 5.82%. This is significantly below the industry average of 23.70%.
| 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
Looking at the Profit Margin, with a value of 21.16%, WMB is in the better half of the industry, outperforming 71.56% of the companies in the same industry.
In the last couple of years the Profit Margin of WMB has grown nicely.
WMB has a better Operating Margin (31.69%) than 71.56% of its industry peers.
In the last couple of years the Operating Margin of WMB has grown nicely.
The Gross Margin of WMB (79.31%) is better than 90.05% 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
WMB has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
Compared to 1 year ago, WMB has about the same amount of shares outstanding.
WMB has more shares outstanding than it did 5 years ago.
WMB has a better debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 1.09, we must say that WMB is in the distress zone and has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 1.09, WMB is in line with its industry, outperforming 45.50% of the companies in the same industry.
The Debt to FCF ratio of WMB is 13.52, which is on the high side as it means it would take WMB, 13.52 years of fcf income to pay off all of its debts.
WMB has a Debt to FCF ratio (13.52) which is comparable to the rest of the industry.
A Debt/Equity ratio of 1.96 is on the high side and indicates that WMB has dependencies on debt financing.
With a Debt to Equity ratio value of 1.96, WMB is not doing good in the industry: 80.57% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.96 | ||
| Debt/FCF | 13.52 | ||
| Altman-Z | 1.09 |
ROIC/WACC0.66
WACC8.2%
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 90.52% 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: 91.00% 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%.
The Earnings Per Share has been growing by 13.18% on average over the past years. This is quite good.
Looking at the last year, WMB shows a small growth in Revenue. The Revenue has grown by 1.73% in the last year.
WMB shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 5.07% yearly.
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
Based on estimates for the next years, WMB will show a quite strong growth in Earnings Per Share. The EPS will grow by 13.84% on average per year.
The Revenue is expected to grow by 10.65% on average over the next years. This is quite good.
EPS Next Y19.42%
EPS Next 2Y15.31%
EPS Next 3Y14.78%
EPS Next 5Y13.84%
Revenue Next Year16.54%
Revenue Next 2Y11.27%
Revenue Next 3Y10.89%
Revenue Next 5Y10.65%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 34.89 indicates a quite expensive valuation of WMB.
63.03% of the companies in the same industry are cheaper than WMB, based on the Price/Earnings ratio.
WMB is valuated rather expensively when we compare the Price/Earnings ratio to 27.15, which is the current average of the S&P500 Index.
WMB is valuated quite expensively with a Price/Forward Earnings ratio of 25.96.
Compared to the rest of the industry, the Price/Forward Earnings ratio of WMB indicates a slightly more expensive valuation: WMB is more expensive than 63.03% of the companies listed in the same industry.
WMB is valuated rather expensively when we compare the Price/Forward Earnings ratio to 21.60, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 34.89 | ||
| Fwd PE | 25.96 |
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 66.82% 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 | 37.84 | ||
| EV/EBITDA | 18.25 |
4.3 Compensation for Growth
WMB's 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.
WMB's earnings are expected to grow with 14.78% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.8
PEG (5Y)2.65
EPS Next 2Y15.31%
EPS Next 3Y14.78%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.18%, WMB has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 6.66, WMB has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 2.42, WMB pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.18% |
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 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 2Y15.31%
EPS Next 3Y14.78%
62.81
+0.14 (+0.22%)
Chartmill FA Rating
GICS SectorEnergy
GICS IndustryGroupEnergy
GICS IndustryOil, Gas & Consumable Fuels
Earnings (Last)
Earnings (Next)
Inst Owners88.57%
Inst Owner Change1.87%
Ins Owners0.4%
Ins Owner Change0.45%
Market Cap76.69B
Analysts76
Price Target63.65 (1.34%)
Short Float %1.4%
Short Ratio2.26
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.18% |
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)3.33%
PT rev (3m)5.17%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-1.43%
EPS NY rev (1m)-0.12%
EPS NY rev (3m)1.1%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)4.68%
Revenue NY rev (1m)2.37%
Revenue NY rev (3m)4.32%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 34.89 | ||
| Fwd PE | 25.96 | ||
| P/S | 7.11 | ||
| P/FCF | 37.84 | ||
| P/OCF | 14.83 | ||
| P/B | 6.14 | ||
| P/tB | 14.28 | ||
| EV/EBITDA | 18.25 |
EPS(TTM)1.8
EY2.87%
EPS(NY)2.42
Fwd EY3.85%
FCF(TTM)1.66
FCFY2.64%
OCF(TTM)4.24
OCFY6.75%
SpS8.83
BVpS10.23
TBVpS4.4
PEG (NY)1.8
PEG (5Y)2.65
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 | 1.09 |
F-Score4
WACC8.2%
ROIC/WACC0.66
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 Y19.42%
EPS Next 2Y15.31%
EPS Next 3Y14.78%
EPS Next 5Y13.84%
Revenue 1Y (TTM)1.73%
Revenue growth 3Y-0.39%
Revenue growth 5Y5.07%
Sales Q2Q%10%
Revenue Next Year16.54%
Revenue Next 2Y11.27%
Revenue Next 3Y10.89%
Revenue Next 5Y10.65%
EBIT growth 1Y-10.93%
EBIT growth 3Y8.18%
EBIT growth 5Y6.95%
EBIT Next Year83.03%
EBIT Next 3Y28.31%
EBIT Next 5Y20.1%
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%