The Williams Companies Inc. based in Oklahoma is an energy company dealing primarily in natural gas processing and transportation. Established in the year 1908 by the Williams Brothers this fortune 500 company has been in business for more than a century now. WMB handles approximately 30% of the natural gas in US used for various purposes e.g., heat the homes, cook the food and even generating electricity.
The Williams Companies owns and operates more than 30,000 miles of pipelines in US. The fourth quarter 2020, adjusted EPS for WMB was below the consensus estimates, which resulted in range bound movement in the stock in last few months.
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A Closer Look at Technical Structures.
The Williams Companies, Inc has been trading in a range for last 5 years and saw a sudden drop in share price in March 2020 during the pandemic and has gone up steadily but at a lower pace compared to the broader market. From a low of $14 it reached around $23 in March 2021. The stock had a strong support at $20 which it broke during the pandemic in March 2020. The new support level is yet to be witnessed as the stock has been on an upward trajectory after that point. WMB is one of the top companies in the energy space with market cap of close to $29B with its close competitor being ONEOK with market cap of approximately $23B.
The most important parameter for the investors in this stock is the dividend yield of 6.94% which provides a cushion to the investors during the uncertain times in the stock market. Also, WMB has been consistently paying dividends every quarter for last several years and the guaranteed income has been a positive incentive for the long-term investors. Even though the stock has a trailing P/E of 138 now it has a projected forward P/E of 19.52 as per Yahoo Finance. WMB has operating margin of 33.17% and Return on equity of 1.28%. The revenue for WMB in the trailing twelve months was $7.72B which is extremely good for a company with market cap less than $30B.
Politics and Energy
As the policy related to energy sector is going to be streamlined and there is transparency in the climate change initiatives by the Biden administration there could be potential increase of inbound interest by the investors. Also, the strong business model and sustainable profit margin in the long run makes WMB a decent company to invest for the long term for the conservative investors. For short term and medium-term investors looking for stellar returns this stock is not suggested as the primary return on this stock would be from the dividend in the long run.