A strong performer from today's afternoon trading session is Williams, whose shares rose 1.6% to $57.75 per share. For those of you thinking about investing in the stock, here is a brief value analysis of the stock using the company's basic fundamental ratios.
Williams's P/B and P/E Ratios Are Higher Than Average:
The Williams Companies, Inc., together with its subsidiaries, operates as an energy infrastructure company primarily in the United States. The company belongs to the Utilities sector, which has an average price to earnings (P/E) ratio of 21.16 and an average price to book (P/B) ratio of 2.36. In contrast, Williams has a trailing 12 month P/E ratio of 29.2 and a P/B ratio of 5.69.
Williams has moved 26.9% over the last year compared to 18.2% for the S&P 500 — a difference of 8.7%. Williams has a 52 week high of $63.45 and a 52 week low of $43.98.
Exceptional Profitability Overshadowed by Excessive Leverage:
| 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $8,201 | $7,719 | $10,627 | $10,965 | $10,907 | $10,503 |
| Operating Margins | 23% | 28% | 25% | 28% | 40% | 32% |
| Net Margins | 10% | 3% | 14% | 19% | 28% | 21% |
| Net Income (M) | $850 | $211 | $1,517 | $2,049 | $3,179 | $2,225 |
| Net Interest Expense (M) | $1,186 | $1,172 | $1,179 | $1,147 | $1,236 | $108 |
| Depreciation & Amort. (M) | $1,714 | $1,721 | $1,842 | $2,009 | $2,071 | $1,800 |
| Diluted Shares (M) | 1,214 | 1,215 | 1,218 | 1,223 | 1,223 | 1,223 |
| Earnings Per Share | $0.7 | $0.17 | $1.24 | $1.67 | $2.6 | $1.82 |
| EPS Growth | n/a | -75.71% | 629.41% | 34.68% | 55.69% | -30.0% |
| Avg. Price | $19.6 | $16.26 | $22.57 | $30.27 | $34.83 | $57.9 |
| P/E Ratio | 28.0 | 95.65 | 18.06 | 18.02 | 13.34 | 31.81 |
| Free Cash Flow (M) | $1,584 | $2,257 | $2,706 | $2,636 | $3,422 | $2,401 |
| CAPEX (M) | $2,109 | $1,239 | $1,239 | $2,253 | $2,516 | $2,573 |
| EV / EBITDA | 11.99 | 10.46 | 10.59 | 11.65 | 9.99 | 18.51 |
| Total Debt (M) | $20,148 | $21,451 | $21,650 | $21,927 | $23,376 | $24,736 |
| Net Debt / EBITDA | 5.46 | 5.43 | 4.46 | 4.33 | 3.34 | 4.8 |
| Current Ratio | 0.4 | 0.62 | 0.91 | 0.78 | 0.77 | 0.5 |
Williams has growing revenues and increasing reinvestment in the business and strong operating margins with a stable trend. Additionally, the company's financial statements display a strong EPS growth trend and generally positive cash flows. However, the firm suffers from not enough current assets to cover current liabilities because its current ratio is 0.5 and a highly leveraged balance sheet.
