Williams Companies (WMB) stock has recovered slightly. However, the energy infrastructure stock is still trading at a notable 20% discount to its 52-week high of close to $30. Natural gas prices were muted last year. Although midstream companies don’t have direct exposure to oil and gas prices, midstream stocks are correlated to energy commodity prices.
Williams Companies: Technical indicators
Williams Companies stock is currently trading at $23.60, almost 3% above its 50-day simple moving average. The stock’s recent recovery pulled it above its 50-day average of $22.90, which could act as short-term support for the stock. WMB’s 200-day average of $25.20 is almost 7% higher than its current price, which might concern investors. This average could act as resistance. WMB’s relative strength index score of 55 implies it is neither overbought nor oversold.
Williams Companies stock is currently trading at an EV-to-EBITDA valuation of 10.5 times its forward earnings estimate. The stock is trading at a discount to its five-year historical average multiple of around 17x. In comparison, Kinder Morgan (KMI) stock is trading at more than 11 times its forward earnings estimate. Last year, KMI stock soared almost 35%, while WMB stock rose just 5%.
WMB and KMI: Analysts’ price targets
Williams Companies stock offers a potential upside of 15% based on analysts’ mean target price of $27.60. Of the 24 analysts covering the stock, 13 recommend “buy,” six rate it as a “strong buy,” five recommend “hold,” and none recommend “sell.”
Meanwhile, analysts’ mean 12-month target price of $22 for Kinder Morgan stock implies a mere 4% upside based on its current market price of $21.20. Of the 24 analysts tracking KMI, 13 suggest “hold,” nine suggest “buy,” two rate it as a “strong buy,” and none suggest “sell.” UBS raised its price target from $25 to $26 today.
At the moment, WMB offers a fair dividend yield of 6.5%, which is higher than Kinder Morgan’s 4.8%. Given its sturdy upside potential and yield, Williams Companies looks strong over the next year. To learn about the outlook for MLP stock Energy Transfer (ET), read How Will Energy Transfer Stock Perform in 2020?