WILLIAMS COS INC (WMB)

US9694571004 - Common Stock

38.825  +0.05 (+0.12%)

Fundamental Rating

4

Overall WMB gets a fundamental rating of 4 out of 10. We evaluated WMB against 214 industry peers in the Oil, Gas & Consumable Fuels industry. WMB scores excellent on profitability, but there are concerns on its financial health. WMB is quite expensive at the moment. It does show a decent growth rate. WMB also has an excellent dividend rating.



7

1. Profitability

1.1 Basic Checks

WMB had positive earnings in the past year.
In the past year WMB had a positive cash flow from operations.
In the past 5 years WMB has always been profitable.
Each year in the past 5 years WMB had a positive operating cash flow.

1.2 Ratios

WMB has a Return On Assets (6.03%) which is in line with its industry peers.
WMB has a better Return On Equity (25.61%) than 72.30% of its industry peers.
WMB has a Return On Invested Capital (7.07%) which is in line with its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for WMB is significantly below the industry average of 45.80%.
The 3 year average ROIC (5.86%) for WMB is below the current ROIC(7.07%), indicating increased profibility in the last year.
Industry RankSector Rank
ROA 6.03%
ROE 25.61%
ROIC 7.07%
ROA(3y)4.48%
ROA(5y)3.15%
ROE(3y)18.89%
ROE(5y)12.96%
ROIC(3y)5.86%
ROIC(5y)5.41%

1.3 Margins

Looking at the Profit Margin, with a value of 29.12%, WMB is in the better half of the industry, outperforming 69.95% of the companies in the same industry.
In the last couple of years the Profit Margin of WMB has grown nicely.
With a decent Operating Margin value of 38.40%, WMB is doing good in the industry, outperforming 69.95% 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 (81.34%) than 88.73% of its industry peers.
In the last couple of years the Gross Margin of WMB has grown nicely.
Industry RankSector Rank
OM 38.4%
PM (TTM) 29.12%
GM 81.34%
OM growth 3Y4.85%
OM growth 5Y11.06%
PM growth 3Y121.08%
PM growth 5YN/A
GM growth 3Y0.93%
GM growth 5Y3.88%

1

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
The debt/assets ratio for WMB is higher compared to a year ago.

2.2 Solvency

WMB has an Altman-Z score of 0.82. 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 (0.82) is worse than 61.50% of its industry peers.
The Debt to FCF ratio of WMB is 7.84, which is on the high side as it means it would take WMB, 7.84 years of fcf income to pay off all of its debts.
WMB's Debt to FCF ratio of 7.84 is in line compared to the rest of the industry. WMB outperforms 46.01% of its industry peers.
WMB has a Debt/Equity ratio of 1.94. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of WMB (1.94) is worse than 84.04% of its industry peers.
Industry RankSector Rank
Debt/Equity 1.94
Debt/FCF 7.84
Altman-Z 0.82
ROIC/WACC0.96
WACC7.37%

2.3 Liquidity

A Current Ratio of 0.77 indicates that WMB may have some problems paying its short term obligations.
With a Current ratio value of 0.77, WMB is not doing good in the industry: 74.18% of the companies in the same industry are doing better.
WMB has a Quick Ratio of 0.77. 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 0.73, WMB is doing worse than 70.89% of the companies in the same industry.
Industry RankSector Rank
Current Ratio 0.77
Quick Ratio 0.73

4

3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 21.91% over the past year.
The Earnings Per Share has been growing by 26.12% on average over the past years. This is a very strong growth
Looking at the last year, WMB shows a decrease in Revenue. The Revenue has decreased by -0.53% in the last year.
Measured over the past years, WMB shows a small growth in Revenue. The Revenue has been growing by 4.66% on average per year.
EPS 1Y (TTM)21.91%
EPS 3Y36.67%
EPS 5Y26.12%
EPS growth Q2Q-12.73%
Revenue 1Y (TTM)-0.53%
Revenue growth 3Y12.21%
Revenue growth 5Y4.66%
Revenue growth Q2Q-4.98%

3.2 Future

Based on estimates for the next years, WMB will show a small growth in Earnings Per Share. The EPS will grow by 5.88% on average per year.
The Revenue is expected to grow by 4.72% on average over the next years.
EPS Next Y-16.29%
EPS Next 2Y-2.27%
EPS Next 3Y1.18%
EPS Next 5Y5.88%
Revenue Next Year-5.63%
Revenue Next 2Y2.46%
Revenue Next 3Y3.92%
Revenue Next 5Y4.72%

3.3 Evolution

The EPS growth rate is decreasing: in the next years the growth will be less 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 stable.

2

4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 17.89, which indicates a rather expensive current valuation of WMB.
Compared to the rest of the industry, the Price/Earnings ratio of WMB indicates a slightly more expensive valuation: WMB is more expensive than 70.42% of the companies listed in the same industry.
WMB is valuated rather cheaply when we compare the Price/Earnings ratio to 25.20, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 21.37, 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 63.85% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of WMB to the average of the S&P500 Index (21.60), we can say WMB is valued inline with the index average.
Industry RankSector Rank
PE 17.89
Fwd PE 21.37

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, WMB is valued a bit more expensive than 69.95% of the companies in the same industry.
WMB's Price/Free Cash Flow is on the same level as the industry average.
Industry RankSector Rank
P/FCF 14.03
EV/EBITDA 11.31

4.3 Compensation for Growth

WMB has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)0.68
EPS Next 2Y-2.27%
EPS Next 3Y1.18%

7

5. Dividend

5.1 Amount

With a Yearly Dividend Yield of 5.06%, WMB is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 5.79, WMB pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.45, WMB pays a better dividend.
Industry RankSector Rank
Dividend Yield 5.06%

5.2 History

The dividend of WMB has a limited annual growth rate of 5.62%.
WMB has paid a dividend for at least 10 years, which is 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)5.62%
Div Incr Years6
Div Non Decr Years6

5.3 Sustainability

WMB pays out 68.61% of its income as dividend. This is not a sustainable payout ratio.
The dividend of WMB is growing around the same rate as the earnings are growing. If this keeps up the dividend growth is sustainable.
DP68.61%
EPS Next 2Y-2.27%
EPS Next 3Y1.18%

WILLIAMS COS INC

NYSE:WMB (4/24/2024, 8:59:08 AM)

38.825

+0.05 (+0.12%)

Chartmill FA Rating
GICS SectorEnergy
GICS IndustryGroupEnergy
GICS IndustryOil, Gas & Consumable Fuels
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap47.31B
Analysts
Price Target
Dividend
Industry RankSector Rank
Dividend Yield 5.06%
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
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Revenue beat(2)
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Revenue beat(8)
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Revenue beat(16)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
Industry RankSector Rank
PE 17.89
Fwd PE 21.37
P/S
P/FCF
P/OCF
P/B
P/tB
EV/EBITDA
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)N/A
PEG (5Y)0.68
Profitability
Industry RankSector Rank
ROA 6.03%
ROE 25.61%
ROCE
ROIC
ROICexc
ROICexgc
OM 38.4%
PM (TTM) 29.12%
GM 81.34%
FCFM
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.21
Health
Industry RankSector Rank
Debt/Equity 1.94
Debt/FCF
Debt/EBITDA
Cap/Depr
Cap/Sales
Interest Coverage
Cash Conversion
Profit Quality
Current Ratio 0.77
Quick Ratio 0.73
Altman-Z
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)21.91%
EPS 3Y36.67%
EPS 5Y
EPS growth Q2Q
EPS Next Y-16.29%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-0.53%
Revenue growth 3Y12.21%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y