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Williams Companies, Inc. (NYSE:WMB) is a Zacks #1 Rank (Strong Buy) company that continues to trade near a 52-week high, while the market struggles. In mid-May, Williams Companies increased its dividend by 10%. The company has paid a dividend every quarter since 1974 with this hike serving as the fifth increase since late 2004. Full-year 2008 analyst earnings expectations of $2.12 per share are up from last month’s $2.03. The most accurate estimate is a much more bullish $2.43 per share. WMB’s 3 – 5 year earnings per share growth expectation of 15% is almost double the industry’s average of 8%.

Full Analysis

Williams Companies is a publicly traded master limited partnership that, through its subsidiaries, finds, produces, gathers, processes and transports natural gas. Williams' operations are concentrated in the Pacific Northwest, Rocky Mountains, Gulf Coast, and Eastern Seaboard.

Income

In mid-May, Williams Companies increased its regular dividend on common stock. The new dividend of 11 cents per share is payable on June 30, 2008, to shareholders of record at the close of business on June 13, 2008.

The company said the new dividend is 10% higher than the 10 cents per share that it paid in each of the four prior quarters, adding that it has paid a common stock dividend every quarter since 1974 with this hike serving as the fifth increase since late 2004.

Growth

In early May, the Zacks #1 Rank (Strong Buy) company announced first-quarter earnings of 57 cents per share, excluding items. The result was well ahead of the year-prior total and topped the consensus estimate 16%. WMB referenced its strong midstream and pipeline businesses as a major contributor to the growth in earnings.

The company, which continues to trade near a 52-week high despite a tough market, offers a return on equity [ROE] of 18%, versus the industry’s average of 13%. WMB’s 3 – 5 year earnings per share growth expectation of 15% is almost double the industry’s average of 8%.

Higher Forecasts

The company also hiked its full-year consolidated earnings guidance to a range of $1.70 to $2.10 per share, up from the previous $1.60 to $2.00 per share.

Wall Street estimates have been climbing higher as well. Full-year 2008 expectations of $2.12 per share are up from last month’s $2.03. The most accurate estimate is a much more bullish $2.43 per share.

Source: Williams Companies: A Natural Gas Play that Thrives