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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
The Williams Companies, Inc. (XNYS:WMB) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
WMB
Name:
THE WILLIAMS COMPANIES, INC. (XNYS:WMB)
Sector:
785.00M
Industry:
Oil & Gas Midstream
CEO:
Mr. Alan Armstrong
Total Employees:
4,783
Our Technological Advancement Rating
Our Rating:
A
Technological advancement compared to industry is 260.37% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF THE WILLIAMS COMPANIES, INC.(WMB) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND OIL & GAS MIDSTREAM INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
33.72
One Month Price Target:
$33.95
Six Month Price Target :
$35.07
Likely Price in One Year's Time:
Ticker:
$36.42
Likely Trading Range Today Under (Normal Volatility)
$33.59
Price Upper limit ($) :
$33.91
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$31.83
This week:
$29.49
This month :
$25.25
Other Primary facts
Market Cap:
40.42B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
1.22B
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
18.96%
-23.74%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$42.50
$38.44
$24.94
$29.00
Medium risk (<10%) entry points
Buy Call
Sell Call
$37.11
Buy Put:
Sell Put:
$36.25
$30.31
$31.19
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
WMB
Sharpe Ratio:
3.05%
Comparison:
WMB, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is 6.55% higher than the industry
& ratio is 33.95% higher than the market/S&P 500 average
Average Returns/Yield of
WMB
Daily returns:
0.09%
Weekly returns:
0.47%
Monthly returns:
1.87%
Yearly returns:
30.53%
Comparison of returns:
Average annual returns/yield (last 3 years) is -26.35% below industry average
Classification:
WMB, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.97
Statistical test of Returns:
WMB has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.78%
Weekly Volatility:
6.21%
Monthly Volatility:
12.43%
Yearly Volatility:
43.05%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.25%
Volatility in last five trading days has been -54.97% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.61%
Weekly VaR:
-12.55%
Monthly VaR:
-25.10%
How Much Can the price of
WMB
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-21%
Worst case (decline):
-86.97%
This translates to price declining to:
$26.60
This translates to price declining to:
$4.40
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
WMB is a 77.19% riskier investment compared to the market/S&P 500 & is 51.80% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -31.42% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
WMB
Beta in relation to market/S&P 500--1.19
Expected beta in 1 year's time:
0.744
Expected beta in 3 year's time:
1.052
Unlevered (debt free) Beta:
0.499
Beta in relation to Nasdaq (XNAS):
0.682
Beta in relation to all global stocks::
0.826
Beta Comparison & Analysis
Beta of competitors/peers::
1.85
Beta is -35.56% lower than peers
Average Industry Beta:
1.441
Beta is -17.26% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
-
-
Alpha provided | Alpha Analysis
Alpha provided:
0.112
Alpha is -36.22% below industry average alpha yield
Alpha is 711% higher than market/& is unsustainably high
Analysis of Cost of Capital of
WMB
Equity cost of capital:
0.113
Equity cost of capital is -13.09% below industry mean WACC
Unlevered (without debt) cost of capital:
4.73%
Before-tax cost of debt:
5.22%
After-tax cost of debt:
4.13%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
4.13%
WACC is -7.48% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$8.97
Revenue growth rate per share of (3Y):
2.94
Annual revenue growth rate is -84.52% below industry average
EPS:
$1.20
Expected Annual growth rate of EPS (3Y):
21.00%
Expected future EPS growth rate is -2437.29% lower than the Oil & Gas Midstream industry
Free cash flow (FCF) per share:
$2.32
Balance sheet equity growth per share: 43.29%
Equity growth rate per share is -2294.35% lower than the industry
Debt per share
$17.07
EBITDA per share
$4.13
Valuation Analysis Today of
WMB
P/E Ratio:
26.32
P/E Ratio of Competitors/Peers:
10.23
P/E ratio is 157.27% higher than main peers & is 46.94% higher than the industry
Stock price/value with industry average P/E ratio: $21.50
WMB is 56.87% overvalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $26.91
Present value of the expected future dividends only: $16.60
P/S (Price to Sales ratio):
3.76
Price to sales ratio is 35.56% above the industry mean
P/B (Price to book value ratio):
2.94
Price to free cash flow: 14.54
-
Net income growth rate (3Y):
-1075.78%
Net income growth rate is 528.48% higher than the average industry net income growth rate
Dividend Analysis
Dividend payout rate: 35.21%
Dividend yeild: 4.95%
Previous Dividend: $0.43
Previous adjusted dividend: $0.43
Previous Dividend: $1.67
Expected next dividend best case: $0.44
Expected next dividend worst case: $0.41
Average dividend payment (long-term): $0.41
Average dividend increase/decrease (growth rate) % per period: 1.14%
Expected next dividend payment date: 26/09/2022
Expected next dividend record date: 09/08/2022
-
Previous dividend payment date: 27/06/2022
Previous dividend record date: 06/10/2022
-
Dividend History:
2022-06-09--$0.43
2021-12-09--$0.41
2021-06-10--$0.41
2022-03-10--$0.43
2021-09-09--$0.41
2021-03-11--$0.41
Dividend growth rate is -99.98% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
183.82%
Net debt to equity ratio:
192.84%
Debt to assets ratio:
45.17%
Net debt to assets ratio:
47.39%
Debt-to-asset ratio is -34.92% below industry average
Ability to repay debt:
Interest coverage ratio:
4.3
Interest coverage ratio is -18.98% less than industry average
Looking forward:
Debt growth rate:
0.00%
-
Debt repayment rate in last quarter: 5.69%
Analysis of Key Statistics
Correlation of price movement with the market:
0.564
Statistical significance of correlation:
WMB has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.464
Stock price is 21.40% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.464
Correlation of price movement with Nasdaq (^IXIC):
0.027
Covariance of price movement with the market:
0.044
Kurtosis
18.322
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
-0.467
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
WMB
Gross Profit Margin Ratio:
172%
Operating Profit Margin Ratio:
23.29%
Operating profit margin is 14.70% higher than the industry
Net Profit Margin Ratio:
172%
Effective Tax Rate:
24.31%
Effective tax rate is 33.29% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
13.00%
Return on equity (ROE) is -76.72% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
3.19%
Return on assets (ROA) is -5.95% lower than the industry
Financial Leverage:
1.8x
Current Ratio:
0.73
Current ratio is -57.41% below industry average
Cash Conversion Cycle (days):
-36.9
Cash conversion cycle is -162.24% below industry average
The remaining useful life of property plant & equipment is: 2.2 years
Stock based compensation to net income ratio:
1.43%
In-depth Efficiency Analysis
Revenue generated per employee:
2.3M
Each employee generates -63% less revenue than industry average revenue per employee
EBITDA generated per employee:
1.1M
Each employee generates 204% more EBITDA than industry average revenue per employee
Profit generated per employee:
307.5K
Each employee generates -211% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
164.1K
Each employee generates -61% less free cash flow than industry average revenue per employee
Assets/Capital per employee
9.0M
Each employee generates -61% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
WMB
VALERO ENERGY CORPORATION (XNYS:VLO)
DEVON ENERGY CORPORATION (XNYS:DVN)
PHILLIPS 66 (XNYS:PSX)
OCCIDENTAL PETROLEUM CORPORATION (XNYS:OXY)
ENERGY TRANSFER UNT (XNYS:ET)
SUNCOR ENERGY INC. (XNYS:SU)
KINDER MORGAN, INC. (XNYS:KMI)
ONEOK, INC. (XNYS:OKE)
Cenovus Energy Inc. (XNYS:CVE)
Current Analyst Ratings
Strong buy�25%
Buy�33%
Hold�21%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
10.93B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
6.21B
4.72B
-
-
589.00M
-
1.19B
1.78B
-
1.17B
1.90B
5.03B
2.55B
1.47B
2.01B
488.00M
1.47B
Statement of Cash Flow
Date:
Period:
498.00M
Differed Income Tax :
115.00M
Stock Based Compensation :
21.00M
Change in Working Capital :
- 143000.00K
Accounts Receivables:
- 3000.00K
Other Working Capital:
34.00M
Other Non-Cash Items:
199.00M
Net Cash Provided by Operating Activities:
1.08B
Investments in PP&E:
- 6000.00K
Net Acquisitions:
- 56000.00K
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
604.00M
-
604.00M
1.97B
201.00M
376.00M
3.15B
29.19B
-
-
5.11B
-
1.32B
42.90B
-
46.05B
1.58B
1.63B
-
-
1.10B
4.31B
20.80B
4.40B
27.77B
-
32.08B
1.25B
- 13378000.00K
- 28000.0K
23.44B
March 31, 2022 at 6:00:00 AM
7.99B
11.32B
43.39B
-
22.43B
21.8B
-
- 298000.00K
- 360000.00K
- 1256000.00K
37.00M
-
- 518000.00K
- 61000.00K
- 1798000.00K
-
- 1076000.00K
604.00M
1.68B
1.08B
- 297000.00K
785.00M
Our Proprietary Portfolio Rating
Our Rating:
A+
Price Forecast/Expected Price in Next 5 Years of
WMB
2023
2024
2025
2026
2027
$36.03
$38.92
$42.04
$45.40
$49.04