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Williams Co (WMB)
NYSE:WMB
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Williams Co
(NYSE:WMB)71Outperform
Positive Factors
Earnings
Williams Companies raised its 2025 guidance midpoint, which was slightly above Street and MSUSA expectations, driven by organic growth projects and higher commodity prices.
Growth Projects
New growth projects include expansions on Northwest and a 10 Bcf Gulf Coast initiative, signaling continued growth potential.
Negative Factors
Free Cash Flow
Free cash flow after dividends was negative, which could indicate challenges in covering dividend payouts with available cash flow.
Williams Co (WMB) vs. S&P 500 (SPY)
Market Cap
$70.24B
Dividend Yield3.3%
Average Volume (3M)8.00M
Price to Earnings (P/E)31.7
Beta (1Y)0.76
Revenue Growth8.06%
EPS Growth-30.11%
CountryUS
Employees5,601
SectorEnergy
Sector Strength57
IndustryFossil Fuels
Share Statistics
EPS (TTM)1.82
Shares Outstanding1,219,369,300
10 Day Avg. Volume8,065,115
30 Day Avg. Volume7,995,596
Financial Highlights & Ratios
PEG Ratio3.78
Price to Book (P/B)N/A
Price to Sales (P/S)6.78
Price to Cash Flow (P/CF)14.10
P/FCF Ratio31.30
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$59.60Price Target Upside4.93% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering11
Williams Co Business Overview & Revenue Model
Company DescriptionWilliams Co (WMB) is a leading energy infrastructure company primarily engaged in the transportation, processing, and storage of natural gas. The company operates across the United States and focuses on connecting North America's significant natural gas supply areas to growing markets for natural gas. Its core services include the operation of interstate natural gas pipelines and the management of various natural gas processing and storage facilities.
How the Company Makes MoneyWilliams Co generates revenue through its extensive network of natural gas pipelines, primarily by charging fees for the transportation of natural gas. The company also earns income from its processing and storage facilities by providing essential services to producers and consumers of natural gas. Key revenue streams include long-term, fee-based contracts that ensure stable cash flow and reduce exposure to commodity price volatility. Additionally, strategic partnerships with other energy companies and investments in infrastructure expansion contribute to Williams Co's earnings by enhancing its capacity and market reach.
Williams Co Financial Statement Overview
Summary
Williams Co shows robust profitability and operational efficiency, with strong profit margins and effective cost management. However, the decline in revenue and free cash flow growth raises concerns about future growth potential. The balance sheet reflects moderate leverage that needs careful monitoring.Income Statement
Williams Co displayed strong gross and net profit margins in 2024, with a gross profit margin of 80.24% and a net profit margin of 21.18%. However, the revenue growth rate was negative at -3.71% compared to 2023, indicating a decline in sales. EBIT and EBITDA margins were robust at 31.79% and 35.42%, respectively, underscoring effective cost management despite the revenue dip.75
Positive
Balance Sheet
Williams Co maintains a stable balance sheet with a debt-to-equity ratio of 2.16, reflecting moderate leverage. The return on equity was strong at 17.89%, showcasing efficient use of equity to generate profits. However, the equity ratio stood at 22.80%, indicating a higher reliance on debt, which could pose risks in a volatile market.70
Positive
Cash Flow
The company experienced a decrease in free cash flow growth of -28.77% in 2024, but maintained a healthy operating cash flow to net income ratio of 2.23, indicating strong cash generation capability. The free cash flow to net income ratio was 1.08, suggesting reasonable cash flow coverage of earnings.68
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 10.50B | 10.91B | 10.96B | 10.63B | 7.72B | Gross Profit |
| 8.43B | 6.80B | 3.68B | 3.21B | 3.06B | EBIT |
| 3.34B | 4.31B | 3.02B | 2.63B | 2.20B | EBITDA |
| 6.57B | 7.77B | 5.70B | 5.09B | 4.58B | Net Income Common Stockholders |
| 2.23B | 3.18B | 2.05B | 1.52B | 211.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 60.00M | 2.15B | 152.00M | 1.68B | 142.00M | Total Assets |
| 54.53B | 52.63B | 48.43B | 47.61B | 44.16B | Total Debt |
| 26.94B | 26.46B | 22.90B | 23.68B | 22.34B | Net Debt |
| 26.88B | 24.31B | 22.75B | 22.00B | 22.20B | Total Liabilities |
| 39.69B | 37.74B | 34.39B | 33.51B | 29.58B | Stockholders Equity |
| 12.44B | 12.40B | 11.48B | 11.42B | 11.77B |
| Cash Flow | Free Cash Flow | |||
| 2.40B | 3.37B | 2.61B | 2.70B | 2.22B | Operating Cash Flow |
| 4.97B | 5.94B | 4.89B | 3.94B | 3.50B | Investing Cash Flow |
| -4.86B | -3.89B | -3.38B | -1.47B | -1.56B | Financing Cash Flow |
| -2.20B | -49.00M | -3.04B | -942.00M | -2.08B |
Williams Co Technical Analysis
Positive
56.80
Price Trends
56.35
Positive
55.20
Positive
48.88
Positive
Market Momentum
0.21
Positive
49.67
Neutral
64.40
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WMB, the sentiment is Positive. The current price of 56.8 is below the 20-day moving average (MA) of 56.82, above the 50-day MA of 56.35, and above the 200-day MA of 48.88, indicating a neutral trend. The MACD of 0.21 indicates Positive momentum. The RSI at 49.67 is Neutral, neither overbought nor oversold. The STOCH value of 64.40 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for WMB.
Williams Co Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
85 Outperform | $54.26B | 12.61 | 31.56% | 6.66% | 4.30% | 10.45% | |
81 Outperform | $63.37B | 14.38 | 10.46% | 6.75% | 5.20% | 18.35% | |
73 Outperform | $134.69B | 26.40 | 8.26% | 6.21% | 24.95% | -17.19% | |
71 Outperform | $70.24B | 31.70 | 17.89% | 3.30% | 8.06% | -30.11% | |
68 Neutral | $60.30B | 23.19 | 8.56% | 4.24% | -0.55% | 10.02% | |
65 Neutral | $58.56B | 18.13 | 17.82% | 4.13% | 24.16% | -6.58% | |
57 Neutral | $8.34B | 5.35 | -5.98% | 7.29% | 0.20% | -69.45% |
* Energy Sector Average
Performance Comparison
WMB
Williams Co
56.80
21.84
62.47%
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18.47
4.41
31.37%
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Kinder Morgan
26.99
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59.42%
OKE
Oneok
93.79
19.62
26.45%
MPLX
MPLX
53.07
15.60
41.63%
TSE:ENB
Enbridge
60.14
15.74
35.46%
Williams Co Earnings Call Summary
Earnings Call Date: Feb 12, 2025 | % Change Since: 2.82% | Next Earnings Date: May 5, 2025
Earnings Call Sentiment Positive
The earnings call reflected a strong performance and optimistic outlook for The Williams Companies, with record demand and successful project execution driving positive growth. Despite some challenges with producer delays and conservative cash tax assumptions, the company raised its 2025 guidance and demonstrated a strong balance sheet and dividend growth.Highlights
Record Peak Demand for Transco
Transco experienced unprecedented demand for natural gas, setting an all-time record by moving 522 million decotherms, about 10% more than the previous monthly record.
Successful Project Execution
Successfully executed large-scale expansion projects like the Regional Energy Access project and the Southside Reliability Enhancement project, running at full contracted capacity.
Record Adjusted EBITDA
Reported a record adjusted EBITDA for the 12th consecutive year, with 2024 figures exceeding the original guidance by $130 million despite low natural gas prices.
Positive 2025 Guidance
Raised 2025 adjusted EBITDA guidance by $250 million to $7.65 billion, representing an 8% growth over 2024 and an 8% 5-year CAGR.
Strong Balance Sheet and Dividend Growth
Improved leverage metrics and a 5% CAGR in dividend growth, with a strong AFFO per share coverage of dividends.
Lowlights
Producer Delays in Deepwater Projects
Experienced delays with customer producers that unfavorably impacted the expected ramp in growth projects like Shenandoah and Whale.
Cash Tax Assumptions
Guidance assumes $300 million in cash taxes with no benefit from potential tax legislation changes, which could affect AFFO per share.
Company Guidance
During The Williams Companies' Fourth Quarter 2024 earnings call, the company highlighted several key financial metrics and strategic initiatives. They reported a record adjusted EBITDA of $7.08 billion for 2024, surpassing the original guidance of $6.95 billion, despite challenging natural gas prices averaging $2.20 per MMBtu. The company anticipates a 3% increase in adjusted EBITDA for 2025, raising the midpoint to $7.65 billion, which would represent an 8% growth over 2024 and an 8% 5-year compound annual growth rate (CAGR). Williams also projects a 30% 5-year CAGR in adjusted EPS and a 9% 5-year CAGR in available funds from operations per share for 2025. They plan to maintain a 5% 5-year CAGR in dividends while keeping a strong dividend coverage. The company's leverage improved by 18% over five years, aiming for a range of 3.5x to 4x in 2025. Their 2025 growth plans include eight interstate transmission projects totaling 1.25 Bcf per day, with a capital expenditure guidance of $1.8 billion, excluding acquisitions. The guidance is conservative regarding the Transco rate case and factors in strategic bolt-on acquisitions. Their natural gas-focused strategy, which has driven a 14% EPS CAGR over the past five years, remains central to their growth trajectory beyond 2025.Williams Co Corporate Events
Private Placements and FinancingBusiness Operations and Strategy
Williams Co Announces Major Power Infrastructure Agreement
Positive
Mar 3, 2025
On February 28, 2025, Williams Co entered into a significant agreement with a large investment-grade company to provide natural gas and power generation infrastructure, investing approximately $1.6 billion. This project, expected to complete in the second half of 2026, marks Williams Co’s first power innovation project, backed by a 10-year fixed-price power purchase agreement, and raises its 2025 growth capex by $925 million, impacting its leverage ratio.
Private Placements and FinancingBusiness Operations and Strategy
Williams Co’s Public Offering for Financial Stability
Positive
Jan 8, 2025
Williams announced the pricing of a $1.5 billion public offering of senior notes, split between $1.0 billion in 5.600% notes due 2035 and $500 million in 6.000% notes due 2055. The proceeds from the offering will be used to repay commercial paper, address near-term debt maturities, and support general corporate purposes, positioning the company for improved financial stability and operational flexibility.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.