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Williams Companies: Growing $30 Billion Midstream Infrastructure Company

Jan. 13, 2019 11:23 AM ETThe Williams Companies, Inc. (WMB)21 Comments


  • Williams Companies' stock price fluctuates heavily with oil prices, despite the company's earnings consistently growing.
  • Williams Companies' primary asset is its Transco pipeline. This pipeline supplies gas to millions of households, along with supplying the gas for LNG exports.
  • Williams Companies is focused on a steady growth plan. The company has enough cash to pay its dividend, invest in future projects, and reduce debt.

Williams Companies (NYSE: NYSE:WMB) is a $30 billion midstream infrastructure company that offers investors a dividend yield of almost 5%. The company has an impressive portfolio of assets, and despite an impressive asset composition, operates in a growing market. As we will see going forward, the company’s impressive and growing portfolio of assets make it a solid investment decision.

Williams Companies - The Street

Williams Companies Overall Strategy

Williams Companies has an impressive overall strategy that it is focused on executing. This strategy is part of what makes the company a great investment decision.

Williams Companies Overview - Williams Companies Investor Presentation

Williams Companies follows a volume-driven natural gas strategy to have low volatility in its earnings. Like all other midstream companies, the company focuses on take-or-pay contracts that result in it getting paid regardless of the volumes moving through its pipelines or the current oil markets. The company is a large-scale energy company with a $52 billion enterprise value, meaning it has $22 billion in debt.

The company anticipates 2019 gross margin to be 97% fee-based showing the strength of the company’s financials. At the same time, the company has met or exceeded adjusted EBITDA consensus each of the past 11 quarters. This shows the company’s financial strength. The company also anticipates an astounding $1.25 billion in excess cash available after dividends in 2019.

As an investment decision, Williams Companies has been focused on growth in a difficult nature. The company has anticipated almost 19% in adjusted EBITDA growth from 2017-2019 despite $3.4 billion in asset sales. The company has a current yield of almost 5.8% and has consistently offered more to investors versus the S&P 500 (NYSEARCA: SPY).

Williams Companies Assets - Williams Companies Investor Presentation

Williams Company has a diverse portfolio of assets. However, the company’s most important single

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