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Williams Companies’ Valuation before Its Q1 Results

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Williams Companies

Williams Companies (WMB) stock is trading at a forward EV-to-EBITDA multiple of 11.4x based on the consensus estimates for 2019. The stock appears to be trading at a large discount compared to its five-year historical average multiple close to 17x.

WMB stk

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Williams Companies stock has risen more than 12% over the past 12 months, while the energy (XLE) sector has fallen more than 6% during the same period. Williams Companies offers a yield of 5.4%. The company’s current valuation looks attractive considering its reasonable earnings growth for the next few years and its lucrative dividend yield.

Peer comparison

Energy midstream giant Energy Transfer (ET) stock is trading at a forward EV-to-EBITDA multiple of 9x, which is lower than the peer average. Midstream giant Kinder Morgan (KMI) is trading at a forward EV-to-EBITDA multiple of 10.6x, which is lower than Williams Companies.

Williams Companies is trading at 29x its forward earnings based on the consensus estimates for 2019, while Kinder Morgan is trading at a forward PE ratio of 19x. Energy Transfer stock is valued at a forward PE ratio of ~9.5x, which is lower than the peer average.

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