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 208 industry peers in the Oil, Gas & Consumable Fuels industry. While WMB belongs to the best of the industry regarding profitability, there are concerns on its financial health. 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.
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
Looking at the Return On Assets, with a value of 4.32%, WMB is in line with its industry, outperforming 57.21% of the companies in the same industry.
With an excellent Return On Equity value of 19.50%, WMB belongs to the best of the industry, outperforming 82.69% of the companies in the same industry.
The Return On Invested Capital of WMB (5.68%) is comparable to the rest of the 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 23.53%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.32% | ||
| ROE | 19.5% | ||
| ROIC | 5.68% |
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 21.61%, WMB is in the better half of the industry, outperforming 71.15% of the companies in the same industry.
In the last couple of years the Profit Margin of WMB has grown nicely.
WMB has a Operating Margin of 32.59%. This is in the better half of the industry: WMB outperforms 75.96% of its industry peers.
In the last couple of years the Operating Margin of WMB has grown nicely.
WMB has a better Gross Margin (79.80%) than 89.90% 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 | 32.59% | ||
| PM (TTM) | 21.61% | ||
| GM | 79.8% |
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.
Compared to 5 years ago, WMB has more shares outstanding
WMB has a better debt/assets ratio than last year.
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.
WMB has a Altman-Z score (1.02) which is comparable to the rest of the industry.
The Debt to FCF ratio of WMB is 15.94, which is on the high side as it means it would take WMB, 15.94 years of fcf income to pay off all of its debts.
With a Debt to FCF ratio value of 15.94, WMB perfoms like the industry average, outperforming 46.15% 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.
The Debt to Equity ratio of WMB (2.06) is worse than 79.81% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.06 | ||
| Debt/FCF | 15.94 | ||
| Altman-Z | 1.02 |
ROIC/WACC0.66
WACC8.58%
2.3 Liquidity
WMB has a Current Ratio of 0.54. This is a bad value and indicates that WMB is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Current ratio value of 0.54, WMB is not doing good in the industry: 84.13% of the companies in the same industry are doing better.
A Quick Ratio of 0.48 indicates that WMB may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.48, WMB is doing worse than 85.10% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.54 | ||
| Quick Ratio | 0.48 |
3. Growth
3.1 Past
The earnings per share for WMB have decreased by -7.58% in the last year.
The Earnings Per Share has been growing by 13.18% on average over the past years. This is quite good.
The Revenue has been growing slightly by 7.42% in the past year.
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)-7.58%
EPS 3Y10.47%
EPS 5Y13.18%
EPS Q2Q%6.98%
Revenue 1Y (TTM)7.42%
Revenue growth 3Y-0.39%
Revenue growth 5Y5.07%
Sales Q2Q%12.82%
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.
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 Y19.04%
EPS Next 2Y15.29%
EPS Next 3Y14.76%
EPS Next 5Y13.84%
Revenue Next Year12.38%
Revenue Next 2Y10.35%
Revenue Next 3Y9.72%
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.
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
Based on the Price/Earnings ratio of 31.73, the valuation of WMB can be described as expensive.
WMB's Price/Earnings ratio is a bit more expensive when compared to the industry. WMB is more expensive than 62.02% 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 26.41.
Based on the Price/Forward Earnings ratio of 24.00, 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 62.98% of the companies in the same industry.
WMB's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 33.87.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.73 | ||
| Fwd PE | 24 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, WMB is valued a bit more expensive than 67.31% 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 | 39.56 | ||
| EV/EBITDA | 16.45 |
4.3 Compensation for Growth
WMB's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The decent profitability rating of WMB may justify a higher PE ratio.
WMB's earnings are expected to grow with 14.76% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.67
PEG (5Y)2.41
EPS Next 2Y15.29%
EPS Next 3Y14.76%
5. Dividend
5.1 Amount
WMB has a Yearly Dividend Yield of 3.32%.
WMB's Dividend Yield is comparable with the industry average which is at 6.31.
WMB's Dividend Yield is a higher than the S&P500 average which is at 2.39.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.32% |
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 98.06% of its income as dividend. This is not a sustainable payout ratio.
The dividend of WMB is growing, but earnings are growing more, so the dividend growth is sustainable.
DP98.06%
EPS Next 2Y15.29%
EPS Next 3Y14.76%
58.06
+0.17 (+0.29%)
Chartmill FA Rating
GICS SectorEnergy
GICS IndustryGroupEnergy
GICS IndustryOil, Gas & Consumable Fuels
Earnings (Last)
Earnings (Next)
Inst Owners88.85%
Inst Owner Change-0.4%
Ins Owners0.4%
Ins Owner Change0.68%
Market Cap70.89B
Analysts75.56
Price Target64.03 (10.28%)
Short Float %1.22%
Short Ratio1.85
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.32% |
Yearly Dividend1.9
Dividend Growth(5Y)4.57%
DP98.06%
Div Incr Years7
Div Non Decr Years7
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-1.99%
Min EPS beat(2)-4.12%
Max EPS beat(2)0.14%
EPS beat(4)1
Avg EPS beat(4)-5.65%
Min EPS beat(4)-13.58%
Max EPS beat(4)0.14%
EPS beat(8)5
Avg EPS beat(8)3.47%
EPS beat(12)9
Avg EPS beat(12)10.82%
EPS beat(16)12
Avg EPS beat(16)10.34%
Revenue beat(2)2
Avg Revenue beat(2)1.69%
Min Revenue beat(2)0.8%
Max Revenue beat(2)2.59%
Revenue beat(4)4
Avg Revenue beat(4)2.18%
Min Revenue beat(4)0.8%
Max Revenue beat(4)4.08%
Revenue beat(8)6
Avg Revenue beat(8)0.23%
Revenue beat(12)8
Avg Revenue beat(12)1.03%
Revenue beat(16)10
Avg Revenue beat(16)3.41%
PT rev (1m)0.59%
PT rev (3m)3.94%
EPS NQ rev (1m)1.11%
EPS NQ rev (3m)1.8%
EPS NY rev (1m)0%
EPS NY rev (3m)1.18%
Revenue NQ rev (1m)0.87%
Revenue NQ rev (3m)-3.21%
Revenue NY rev (1m)-1.81%
Revenue NY rev (3m)-1.43%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.73 | ||
| Fwd PE | 24 | ||
| P/S | 6.32 | ||
| P/FCF | 39.56 | ||
| P/OCF | 13.27 | ||
| P/B | 5.7 | ||
| P/tB | 13.28 | ||
| EV/EBITDA | 16.45 |
EPS(TTM)1.83
EY3.15%
EPS(NY)2.42
Fwd EY4.17%
FCF(TTM)1.47
FCFY2.53%
OCF(TTM)4.38
OCFY7.54%
SpS9.19
BVpS10.19
TBVpS4.37
PEG (NY)1.67
PEG (5Y)2.41
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.32% | ||
| ROE | 19.5% | ||
| ROCE | 7.3% | ||
| ROIC | 5.68% | ||
| ROICexc | 5.79% | ||
| ROICexgc | 6.76% | ||
| OM | 32.59% | ||
| PM (TTM) | 21.61% | ||
| GM | 79.8% | ||
| FCFM | 15.96% |
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-Score6
Asset Turnover0.2
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.06 | ||
| Debt/FCF | 15.94 | ||
| Debt/EBITDA | 4.28 | ||
| Cap/Depr | 153.04% | ||
| Cap/Sales | 31.64% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 89.38% | ||
| Profit Quality | 73.87% | ||
| Current Ratio | 0.54 | ||
| Quick Ratio | 0.48 | ||
| Altman-Z | 1.02 |
F-Score6
WACC8.58%
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)-7.58%
EPS 3Y10.47%
EPS 5Y13.18%
EPS Q2Q%6.98%
EPS Next Y19.04%
EPS Next 2Y15.29%
EPS Next 3Y14.76%
EPS Next 5Y13.84%
Revenue 1Y (TTM)7.42%
Revenue growth 3Y-0.39%
Revenue growth 5Y5.07%
Sales Q2Q%12.82%
Revenue Next Year12.38%
Revenue Next 2Y10.35%
Revenue Next 3Y9.72%
Revenue Next 5Y10.65%
EBIT growth 1Y-0.25%
EBIT growth 3Y8.18%
EBIT growth 5Y6.95%
EBIT Next Year82.49%
EBIT Next 3Y28.45%
EBIT Next 5Y20.1%
FCF growth 1Y-35.03%
FCF growth 3Y-5.24%
FCF growth 5Y8.26%
OCF growth 1Y-4.57%
OCF growth 3Y8.03%
OCF growth 5Y6.14%