Seeking Alpha

Williams +18% as dividend hike sweetens Access Midstream deal

  • "This is all certainly being driven by the dividend," says BMO analyst Carl Kirst on the Williams Cos. (WMB +18.4%) promises a 32% dividend hike after it buys control of Access Midstream Partners (ACMP +1.7%) for $6B.
  • Because all ACMP's revenue comes from fixed fees, ~80% of cash flow at WMB will be guaranteed after the takeover, Kirst says, with ACMP unitholders getting a higher payout in exchange for slower growth at the combined company.
  • Maxim Group believes WMB will continue to raise its dividend at a ~10% rate for several years beyond 2017, given strong coverage ratios and opportunities due to expected continued increase in shale activity and the need for energy infrastructure development in the U.S. (
  • Also: WPZ +6.5%.
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