Williams Companies, Inc. (WMB) stock analysis

P/E above its 5-year median

Williams Companies's P/E of 27.5 is above its own 5-year median of 25.7.

P/E above the industry

Williams Companies's P/E of 27.5 is above the Gas Production and Distribution median of 17.3.

EV/EBITDA above its 5-year median

Williams Companies's EV/EBITDA of 16.7 is above its 5-year median of 14.9.

P/B above the industry

Williams Companies's price-to-book of 6.39 is above the Gas Production and Distribution median of 2.10.

Trading above fair value

The share price of $68.92 is above our fair value estimate of $48.73.

Margin of safety under 20%

The price is 41.4% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew 2.9% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew 8.6% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew 26.5% over the last twelve months, against a 5-year average of 65.5% a year.

Growing slower than the industry

Revenue grew 8.7% over the last twelve months; the Gas Production and Distribution median is 13.6%.

Guidance raised

Williams Companies raised its 2026 AFFO per common share outlook on Aug 3, 2026.

Gross margin trend

This company does not report gross profit.

Return on equity over 15%

Return on equity was 24.0% over the last twelve months and averaged 19.2% over five years.

Return on capital under 10%

Return on invested capital was 8.5%, below the 10% that usually covers the cost of capital.

Return on equity above the industry

Williams Companies's return on equity of 24.0% is above the Gas Production and Distribution median of 12.1%.

Earnings grew over 5 years

Net income grew 65.5% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 25.2% over the last twelve months, against a 5-year average of 21.0%.

Net margin above the industry

Williams Companies's net margin of 25.2% is above the Gas Production and Distribution median of 13.1%.

High debt

Debt is 233% of shareholders' equity, above the 40% we consider low.

Debt rising against equity

Debt to equity rose from 190% five years ago to 233%.

Debt not well covered by cash flow

Operating cash flow over the last twelve months equals 19.5% of total debt; we look for at least 20%.

Interest not well covered

Operating income covers interest expense 3.1 times; we look for at least 5.

Short-term assets don't cover short-term debts

Current assets are 0.48 times current liabilities.

Elevated bankruptcy risk

The Altman Z-score is 1.23; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Williams Companies paid dividends worth 3.0% of the share price over the last twelve months.

Yield below Treasuries

The 3.0% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Williams Companies yields 3.0%.

Dividend was cut

The dividend per share fell by more than 10% at least once in the last 10 fiscal years.

Covered by earnings

Dividends take 81.5% of net income.

Cash-flow cover

Needs dividends paid and free cash flow.