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There are 2 articles on this stock available only to PRO subscribers.
4 Key Takeaways From The Year's Biggest Acquisition In The Energy Patch
- WMB's acquisition of the remaining general-partner interest in ACMP and proposed merger of ACMP and WPZ hold several important implications for investors.
- The transaction served as a reminder that the energy bull market favors general partners, which benefit disproportionately from their associated MLPs' growth stories.
- Blue-chip MLPs will continue to rely on acquisitions to drive above-trend distribution growth.
- For much of the money flowing into the MLP space, yield compression is preferable to distribution accumulation. This momentum can reverse quickly.
- MLPs with extensive, integrated asset bases have the scale to pursue growth projects that aren't feasible for smaller operators.
Williams Companies Offers Growth, Upside, And Risk
- Williams Companies offers investors exposure to growth in midstream infrastructure demand, particularly in the Utica and Marcellus shales.
- Acquiring GIP's interest in Access Midstream Partners and merging with Williams Partners creates a more stable, diversified MLP holding and one with significant growth projects contemplated over the next decade.
- Williams Companies seems ready for a decade where distributable cash flow could grow more than 10% a year, supporting a fair value in the mid-$60s.
The Williams Companies, Berkshire Hathaway Lead 20 Best Bond Trades With Maturities Of 10 Years Or MoreDonald van Deventer • Mon, Jun. 9
- There were 25,672 bond trades in 4,362 non-call fixed-rate corporate bonds worth $8 billion on June 6.
- We rank all trades with volume of $5 million or more, and maturities of 10 years and longer by the ratio of credit spread to default probability.
- The Williams Companies and Berkshire Hathaway lead the list of 20 best value bond trades.
Goldman Sachs, The Williams Companies Lead 20 Best Value Bond Trades With Maturities Of 10 Years Or More
- On May 30 there were 28,578 bond trades in 4,710 fixed rate corporate debt issues worth $8.7 billion.
- We rank the 20 best value trades by the ratio of credit spread to default probability.
- Goldman Sachs Group and the Williams Companies lead the best value ranking.
ModernGraham Annual Valuation Of Williams Companies
Williams Companies - An Active Transactor, But A Good Value?
The Best Natural Gas Play May Be Williams Brothers
Huge Dividend Growth Plan Makes Williams Companies A Buy
Williams Companies To Super-Size Dividend Growth Rate
Why Williams Companies Is A Better Value Than WPX Energy
Williams Companies: There Are Better Pipeline Plays
Wed, Oct. 29, 6:49 PM
- Williams Cos. (NYSE:WMB) reported soaring Q3 earnings, but the result was attributed mostly to a gain related to its interest in Access Midstream Partners (NYSE:ACMP), which recently agreed to merge with affiliate Williams Partners (NYSE:WPZ); adjusted for the gain, EPS from continuing operations fell to $0.15 from $0.19.
- In addition to its Q3 dividend increase, WMB also affirms dividend growth guidance of ~15% annually -- through 2017 with planned dividends of ~$1.96 in 2014, $2.46 in 2015, $2.82 in 2016, $3.25 in 2017.
- WPZ says its Q3 earnings fell 24% amid weaker natural gas liquids margins and higher maintenance costs; CEO Alan Armstrong says the results were as expected and mostly the result of the outage at its Geismar olefins plant.
- Earlier today, WPZ said it expects its expanded Geismar plant will begin manufacturing ethylene for sale next month.
Wed, Oct. 29, 4:59 PM
Wed, Oct. 29, 3:57 PM
- Williams Partners (WPZ +1.6%) says it plans to resume ethylene production as soon as next month at its rebuilt and expanded Geismar, La., olefins plant following a series of delays after a 2013 explosion at the site.
- WPZ says all major construction related to Geismar’s rebuild, expansion and safety-related upgrades has been completed, and the plant is scheduled to begin manufacturing ethylene for sale in November.
- The 600M lb./year expansion project will bring Geismar’s ethylene production capacity to 1.95B lbs./year from 1.35B lbs/year, with WPZ's share of the total capacity amounting to ~1.7B.
- WMB +3.1%.
Mon, Oct. 27, 5:40 AM
- Williams Cos. (NYSE:WMB) has sweetened the terms of an agreement to combine two MLPs controls, Williams Partners (NYSE:WPZ) and Access Midstream Partners (NYSE:ACMP), in a move that will create a pipeline operator with a combined enterprise value of $50B.
- Investors who own WPZ units will receive ~0.87 of a unit of ACMP for each WPZ unit they own, up from the initial offer of 0.85; prior to the tie-up, existing ACMP holders will receive more units of the partnership.
- Williams expects the merger to be completed early next year, with the new entity set to distribute $3.65/unit in 2015.
- "This is another big step toward our goal of becoming the leading natural-gas infrastructure provider in North America," Williams CEO Alan Armstrong says. (PR)
Mon, Oct. 20, 7:39 AM
- Tesoro Logistics (TLLP, TSO) agrees to acquire the natural gas pipeline and processing business owned by QEP Resources (NYSE:QEP) in a $2.5B deal.
- TLLP says the deal will expand its scope to include natural gas in addition to oil, as QEP owns gas processing plants and oil and gas pipelines in Wyoming, Colorado, Utah and North Dakota.
- To help pay for the deal, plans a public offering of 19.35M common units.
- QEP says selling the midstream business would improve its financial position and help it pay down debt, as well as improve its competitive position through increased capital investment in its E&P assets.
- Williams Cos. (NYSE:WMB) and Questar (NYSE:STR) reportedly had submitted bids for the assets.
Fri, Oct. 17, 6:06 PM
- QEP Resources (NYSE:QEP) +4.1% AH after Bloomberg reports that Williams Cos. (NYSE:WMB) is among the bidders for its Entrada Midstream natural gas pipeline unit, which could fetch ~$2.5B in a sale.
- Questar (NYSE:STR), QEP’s former parent, also is interested in Entrada, a spokesperson for the gas utility said separately today.
- Entrada and 56%-owned QEP Midstream (NYSE:QEPM) own nearly 3K miles of gas pipelines in the Rocky Mountain region, handling gas gathering and processing services for several major energy companies.
Wed, Oct. 8, 12:05 PM
- One of the best ways to play the growing demand around the world for natural gas, as well as the onset of colder weather, is to look for the top natural gas MLPs, and 24/7 Wall St. has screened the Jefferies list of top natural gas MLPs for those with the best upside potential and the top yield.
- AmeriGas Partners (NYSE:APU) is a retail and wholesale distributor of propane gas and related equipment and supplies in the U.S.; propane usually trades at almost 2x the price of spot gas.
- ONEOK Partners (NYSE:OKS) sported a distribution coverage ratio of 1.02x in Q2; a ratio greater than 1x indicates safety for distributions and distribution growth as well as cash availability to fund growth projects.
- Also making the cut: WMB, DPM.
Thu, Aug. 21, 11:43 AM
- Hedge funds are having a difficult time of it again this year, up 1% vs. a 7.5% gain for the S&P 500, according to Goldman Sachs, which crunched the numbers on 775 funds with $1.9T in AUM.
- Nevertheless, Goldman's list of 50 stocks which "matter most" to hedge funds has outperformed the S&P 500 on a quarterly basis 66% of the time since 2001. The stocks this quarter (posted in order of the number of funds in which a name is a top-10 holding):
- ACT, AAPL, FB, AGN, AAL, GM, TWC, AIG, MSFT, HTZ, CHTR, MU, WMB, LNG, C, DAL, HCA, APC, CBS, ALLY, GOOGL, APD, NRF, BAC, EBAY, LBTYK, PCLN, VRX, BIDU, DTV, DISH, DG, EQIX, MA, WAG, ARCP, GILD, LINTA, MON, FOXA, VC, AMZN, BRK.A, BRK.B, SUNE, CMCSA, JPM, MIC, CCI, HES, LAMR.
- A special call-out to Northstar Realty (NYSE:NRF), Visteon (NYSE:VC), SunEdison (NYSE:SUNE), Macquarie Infrastructure (NYSE:MIC), and Lamar Advertising (NASDAQ:LAMR) for making the list of hedge fund hotels despite their relatively tiny market caps.
Mon, Aug. 18, 2:19 PM
- Morgan Stanley calls Kinder Morgan‘s (KMI, KMP) decision to abandon the MLP structure a “watershed event” and a “prudent decision” that leaves the company better positioned and with favorable tax advantages.
- The Stanley analysts say the major implications of the deal for the MLP marketplace include the return of large-cap midstream stocks such as WMB and ETE to the M&A hunt as they continue to find different ways to repair cost of capital challenges, and the MLP structure's trajectory that becomes more challenged as the MLP’s size/GP burden and the parent’s size both grow larger, likely necessitating restructuring.
- The firm sees some downside for KMI with the move, as the cash flow generation of assets remains the same, equity financing needs are ongoing, and risks around certain legacy businesses (particularly the CO2 assets) coupled with the sheer size of KMI could still serve as headwinds.
Wed, Jul. 30, 5:56 PM
- Williams Cos. (NYSE:WMB) and Williams Partners (NYSE:WPZ) each report lower Q2 earnings (I, II), hurt by lower margins for natural gas liquids and olefins.
- WMB says adjusted earnings from continuing operations rose to $0.23/share from $0.19, while revenue fell 5% Y/Y to $1.68B; WPZ's profit of $0.11/unit fell from $0.31 a year earlier.
- WMB affirms dividend growth guidance of ~15% annually from the higher Q3 2014 base; says capex has been decreased by ~$565M to reflect a shift in capital spending to periods beyond 2016 for developing Canadian projects.
- WMB says the rebuild and expansion of its Geismar, La., olefins plant is substantially complete, but due to more time required to modify existing safety systems, it now expects full production and ethylene sales by Q4.
- Earlier today, WPZ unveiled plans for a $150M project to increase natural gas distribution capacity to areas of the New Jersey coast affected by Hurricane Sandy, in addition to $4.3B in expansion projects planned through 2017.
Wed, Jul. 30, 5:21 PM
Wed, Jul. 16, 6:58 PM
- Kevin Birzer of the Tortoise MLP & Pipeline Fund has averaged 24% annual returns over the past three years, and his top current holding is Spectra Energy (NYSE:SE) thanks to its "great footprint of assets" and low risk via $20B in pipeline growth projects with solid commitments up front.
- SE can grow its distributions at a ~10% rate for many years to come, Birzer says; combined with a ~3% yield, he sees 14% annual returns over the long term.
- Birzer also likes Williams Cos. (NYSE:WMB), which has a footprint in all the big U.S. plays except the Bakken and says it can grow cash flow 15%/year through 2017; Oneok (NYSE:OKE), with total returns of ~13%/year; Plains GP Holdings (NYSE:PAGP) as a Permian Basin play; and Kinder Morgan (NYSE:KMI), whose management team Birzer believes is "running assets for the long term."
Tue, Jul. 8, 12:27 PM
- Williams Cos. (WMB -0.2%) is added to the U.S. Focus List at Credit Suisse, which sees the stock as one of its top investment ideas despite the recent move in the stock over the past few weeks.
- Credit Suisse says its $69 price target represents a "comfortable" potential 20% upside based on a yield of ~3.5%; based on pure-play GP comps and WMB's growth profile, the firm says this yield could settle closer to 3%, which would drive the price closer to $80.
Thu, Jul. 3, 3:20 PM
- A recent surge of low-magnitude earthquakes in Oklahoma probably is the result of the underground disposal of vast quantities of wastewater generated by oil and gas extraction, according to a new study published today in the journal Science.
- The researchers also calculated that four of the highest-volume wells in Oklahoma are capable of triggering ~20% of recent central U.S. quakes, and found that such induced quakes could potentially occur more than 30 km from the well.
- The Cornell geophysics professor who led the study says the results suggest regulators and oil companies should avoid disposing of wastewater near major faults and do a better job monitoring the activity.
- Among energy firms with a significant Oklahoma presence: CHK, CLR, APA, DVN, SD, EOG, MRO, OKE, OKS, GPOR, WPX, WMB, WPZ, LPI, CWEI, NFX, NGL, COG, WLL, NBL, MPO, PQ, XEC.
Tue, Jul. 1, 3:58 PM
- Williams Cos. (WMB +0.6%) completes its acquisition of the 50% general partner interest and 55.1M limited partner units in Access Midstream Partners (ACMP +1%).
- WMB says the merged MLP would have a 2015 distribution increase of at least 25% above ACMP's current guidance of $2.79/unit, would have a best-in-class distribution growth rate of 10%-12% annually through 2017, and enjoy strong investment-grade ratings: WMB foresees distribution coverage of ~1.2x in 2015 and at or above 1.1x through 2017.
- Howard Weil raises its target price for WMB to $68 from $43, noting that not only has ACMP been one of the fastest growing MLP's but the assets are essentially in all of the growing U.S. basins, with the largest drivers of growth in WMB's wheelhouse in the Northeast, the Gulf Coast and the Rockies (Briefing.com).
Tue, Jun. 17, 3:43 PM
- Williams Cos. (WMB +3.7%) adds to yesterday's 18% surge following an upgrade to Buy from Hold and a $67 price target at Deutsche Bank, which says it continues to see upside potential for the stock following its planned $6B acquisition of Access Midstream Partners (ACMP -5.6%).
- ACMP has given up its initial gains from news of the deal and dropped sharply, as shares are downgraded to Neutral from Buy at Ladenburg Thalmann; however, Wunderlich ups its target price for ACMP to $77 from $64, noting that the merged MLP's 2015 distributions should be 25% and 2016 should come in at least 20% above current guidance (briefing.com).
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