The Williams Companies, Inc.
The Williams Companies, Inc. Fundamental Analysis
The Williams Companies, Inc. (WMB) shows moderate financial fundamentals with a PE ratio of 33.86, profit margin of 21.93%, and ROE of 20.84%. The company generates $11.9B in annual revenue with weak year-over-year growth of -3.70%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 35.1/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze WMB's fundamental strength across five key dimensions:
Efficiency Score
WeakWMB struggles to generate sufficient returns from assets.
Valuation Score
WeakWMB trades at a premium to fair value.
Growth Score
WeakWMB faces weak or negative growth trends.
Financial Health Score
WeakWMB carries high financial risk with limited liquidity.
Profitability Score
ExcellentWMB achieves industry-leading margins.
Key Financial Metrics
Is WMB Expensive or Cheap?
P/E Ratio
WMB trades at 33.86 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, WMB's PEG of 3.30 indicates potential overvaluation.
Price to Book
The market values The Williams Companies, Inc. at 6.92 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 8.00 times EBITDA. This is generally considered low.
How Well Does WMB Make Money?
Net Profit Margin
For every $100 in sales, The Williams Companies, Inc. keeps $21.93 as profit after all expenses.
Operating Margin
Core operations generate 36.83 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $20.84 in profit for every $100 of shareholder equity.
ROA
The Williams Companies, Inc. generates $4.47 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
The Williams Companies, Inc. generates strong operating cash flow of $5.89B, reflecting robust business health.
Free Cash Flow
The Williams Companies, Inc. produces free cash flow of $898.43M, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $0.74 in free cash annually.
FCF Yield
WMB converts 1.01% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
33.86
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
3.30
vs 25 benchmark
P/B Ratio
Price to book value ratio
6.92
vs 25 benchmark
P/S Ratio
Price to sales ratio
7.42
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
2.29
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.53
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.21
vs 25 benchmark
ROA
Return on assets percentage
0.04
vs 25 benchmark
ROCE
Return on capital employed
0.08
vs 25 benchmark
How WMB Stacks Against Its Sector Peers
| Metric | WMB Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 33.86 | 20.19 | Worse (Expensive) |
| ROE | 20.84% | 1019.00% | Weak |
| Net Margin | 21.93% | -44017.00% (disorted) | Strong |
| Debt/Equity | 2.29 | -0.65 (disorted) | Distorted |
| Current Ratio | 0.53 | 4.60 | Weak Liquidity |
| ROA | 4.47% | -11655350.00% (disorted) | Weak |
WMB outperforms its industry in 1 out of 6 key metrics, particularly excelling in Net Margin, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews The Williams Companies, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
27.32%
Industry Style: Cyclical, Value, Commodity
High GrowthEPS CAGR
160.23%
Industry Style: Cyclical, Value, Commodity
High GrowthFCF CAGR
33.90%
Industry Style: Cyclical, Value, Commodity
High Growth