The Williams Companies, Inc. (WMB)
Valuation Overview•Is The Williams Companies, Inc. Overvalued or Undervalued?
Commands a premium valuation multiple over its peers, likely pricing in superior execution.
Moderate quality score of 63/100, reflecting stable operating margins and manageable leverage.
Analysts remain bullish, forecasting further upside expansion with consensus targets suggesting solid gains.
Verdict: Solid fundamental quality, though solvency presents a headwind.
Wall Street is broadly bullish, projecting solid upside. This is paired with healthy capital returns, anchored by a strong dividend yield, though free cash flow coverage appears tight.
WMB demonstrates strong business quality with robust profitability and healthy margins. However, the balance sheet carries elevated leverage, requiring careful monitoring of debt servicing capabilities.
The company exhibits steady, low-single-digit revenue growth paired with robust earnings compounding (8.6% EPS 3Y CAGR). This growth is supported by elite operational efficiency, sustaining an impressive 38.8% operating margin.
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $3.0B | +13.8% | +2.9% | +9.1% | +5.0% | |
| EBITDA | $1.7B | — | +10.3% | — | — | |
| Net Income | $912.0M | +17.7% | +8.5% | — | — | |
| EPS (Diluted) | $0.71 | +17.6% | +8.6% | +66.0% | — | |
| Free Cash Flow | $244.0M | -58.1% | -27.2% | -14.7% | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 62.8% | 54.6% | 51.8% | 52.0% |
| Operating Margin | 38.8% | 36.0% | 32.1% | 24.2% |
| Net Margin | 23.8% | 24.1% | 21.0% | 13.8% |
| FCF Margin | 6.1% | 20.7% | 22.3% | 18.2% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q2'26Latest | $0.63 | $0.73 | +15.1% | ||
| Q1'26 | $0.57 | $0.55 | -4.0% | ||
| Q4'25 | $0.52 | $0.49 | -5.0% | ||
| Q3'25 | $0.48 | $0.46 | -4.2% | ||
| Q2'25 | $0.57 | $0.60 | +5.8% | ||
| Q1'25 | $0.47 | $0.47 | +0.0% | ||
| Q4'24 | $0.42 | $0.43 | +2.6% | ||
| Q3'24 | $0.38 | $0.43 | +12.2% |
Total return is +27.1% (1Y), outperforming the benchmark by +2.2%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | +21.9% | +12.6% | — |
| 1Y | +27.1% | +2.2% | +3.5% |
| 3YCAGR | +37.1% | +16.5% | +19.1% |
| 5YCAGR | +25.9% | +12.0% | +35.5% |
| 10YCAGR | +14.9% | +0.9% | — |
The S&P 500 is at 31.3x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about The Williams Companies, Inc. (WMB) valuation, health, and returns.
The Williams Companies, Inc. is estimated to be fair under our discounted cash flow framework. relative multiples indicate the stock is Expensive versus peers compared to industry peers. trading near fair value (DCF: $75.26)
The Williams Companies, Inc. has multiple valuation anchors: DCF Intrinsic Value: $75.26 | Peer Relative Fair Value: $34.46 | Wall Street Analyst Target: $83.75 (implying +14.5% upside). A convergence of these signals offers higher conviction.
The Williams Companies, Inc. displays good financial health with a composite quality score of 63/100, supported by a Altman Z-Score of 0.6 (distress zone), Piotroski F-Score of 7/9, Return on Invested Capital (ROIC) of 7.7%.
The Williams Companies, Inc. pays a 2.7% dividend yield, covered by a 93% payout ratio with 8 years of growth, supplemented by a 0.0% buyback yield.
The Williams Companies, Inc.'s current growth trajectory is Accelerating. The company achieved +13.8% 1Y revenue growth and +17.6% 1Y EPS growth, compared to its 3Y revenue CAGR of +2.9%.
Wall Street consensus is Buy based on 34 analysts, beating EPS expectations in 67% of recent quarters with a 1-quarter streak. The consensus price target represents a +14.5% change from current levels.
Investment risks for The Williams Companies, Inc. include: -12.4% 1-year max drawdown, elevated distress risk, stretched payout ratio. Volatility risk is characterized by a beta of 0.10x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.