Williams Companies Inc

Williams Companies stock has recovered slightly. However, the energy stock is still trading at a 20% discount to its 52-week high of close to $30.

Energy Transfer (ET) stock had a weak run despite strong earnings growth in 2019. Here’s a look into how analysts think ET will perform in 2020.

Midstream MLPs have recovered after hitting multiyear lows early this month. The ALPS Alerian MLP ETF (AMLP) is up more than 10% in the last two weeks.

The analyst ratings are based on rigorous analysis of fundamentals. Let’s take a look at these ratings and price targets for top energy stocks.

This year, ONEOK (OKE) stock has risen roughly 32%, while peers Kinder Morgan (KMI) and Williams Companies (WMB) are up 26% and 3%, respectively.

Despite solid earnings growth this year, Energy Transfer stock fell close to its multiyear lows recently. Could this weakness be seen as an opportunity?

Williams Companies stock fell for the seventh consecutive day on Wednesday and closed almost at an 11-month low. Midstream stocks are trading weak.

Energy Transfer stock fell below $12 yesterday. Once again, the company’s strong earnings results, released November 6, didn’t boost the stock.

Energy Transfer (ET) plans to report its Q3 earnings today after the bell. ET has reported significant earnings growth in the last several quarters.

Despite stable earnings and dividend growth, MLP stocks are depressed. We look at the top midstream energy stocks’ performance in the past 12 months.

Kinder Morgan (KMI) currently trades at an attractive yield of about 5%. It expects to raise its dividends by 25% in 2020.

Williams Companies (WMB) stock has fallen 6% while natural gas is down 15% in the last three weeks. WMB has fallen more than 15% in the last 12 months.

Let’s take a look at three C-corp dividend stocks in the midstream sector that offer attractive total return potential, with very attractive yields.

Natural gas infrastructure giant Williams Companies (WMB) released its second-quarter results yesterday after markets closed.

We expect Williams Companies’ earnings on Wednesday after markets close. the company will likely report an adjusted EBITDA of $1.22 billion.

Raymond James upgraded Williams Companies (WMB) and downgraded Kinder Morgan (KMI) on June 26. Raymond James downgraded KMI from “outperform” to “market perform.” Based on consensus estimates, Kinder Morgan has a mean price of $21.7 against its current market price of $20.6, indicating an estimated upside of 5% for the next year.

Kinder Morgan (KMI) stock has outperformed its top midstream peers so far in 2019. The stock is up roughly 28% year-to-date.

Williams Companies reported an adjusted EBITDA of $1.21 billion, which missed the consensus estimates for the quarter ending March 31.

For Williams Companies stock, 11 analysts recommended a “buy,” eight recommended a “strong buy,” and two recommended a “hold.”

Williams Companies (WMB) stock is trading at a dividend yield of 5.4%, which is close to its five-year average.

Williams Companies (WMB) stock is trading at a forward EV-to-EBITDA multiple of 11.4x based on the consensus estimates for 2019.

Williams Companies’ (WMB) flattish leverage trend suggests that its earnings have grown mainly in proportion with its debt.

Kinder Morgan (KMI) reported its first-quarter results after the markets closed yesterday.

Based on analysts’ consensus estimates, Energy Transfer stock has a target price of $20.83 compared to its current market price of $15.43.

Kinder Morgan (KMI) is expected to report its earnings results for the first quarter of 2019 on April 16.

Around 74% of the Reuters-surveyed analysts have rated Enbridge as a “buy” or “strong buy,” while the remaining analysts rate it as a “hold.”

Enbridge has paid dividends for more than 64 years. Enbridge has increased its dividends for 24 consecutive years.

NGL Energy Partners (NGL) generated total returns, including price appreciation and dividends, of ~50% in the first quarter.

Crude oil prices rose ~32% in the first quarter. The strength in crude oil prices and strong fourth-quarter performances drove midstream stocks.

US natural gas production continues to surge. It rose by 11% in 2018, the highest ever annual increase.

Based on analysts’ estimates, Energy Transfer (ET) stock has a target price of $20.83—compared to its current market price of $15.28.

Recently, Energy Transfer (ET) stock had an implied volatility of 23%, which is close to its 15-day average volatility.

Energy Transfer is trading at a forward EV-to-EBITDA multiple close to 11x based on the consensus earnings estimates for the next 12 months.

Recently, the short interest in ONEOK (OKE) rose 16.8%. In comparison, the short interest in Williams Companies (WMB) fell 9.2%.

So far, midstream stocks Kinder Morgan (KMI), ONEOK (OKE), and Williams Companies (WMB) have each risen ~30% in 2019.

As investors, it can be difficult to escape from the lure of high yields. The idea of high and regular income looks attractive.

On March 21, the implied volatility of Williams Companies (WMB) stock was 17%, lower than its 15-day average.

Last week, Plains All American Pipeline (PAA), Williams Companies (WMB), and ONEOK (OKE) rose 2.5%, 2.3%, and 1.9%, respectively.

Midstream stocks and MLPs broadly outperformed the broader markets last week. The Alerian MLP Index was flat while the S&P 500 Index fell 2.2% for the week.

The US crude oil (USO) supply includes domestic production and imports. The supply gets consumed as inputs to refineries and exports.

Kinder Morgan is trading at a forward EV-to-EBITDA valuation multiple close to 10.3x, which is lower than many of its peers.

On March 1, Stifel raised its target price for ONEOK from $58 to $69. On February 27, Mizuho raised its target price from $70 to $73.

Cheniere Energy Partners, Magellan Midstream Partners, and Noble Midstream Partners were among the biggest gains last week.

Cheniere Energy (LNG) stock rallied ~13% in the last 12 months. The stock is trading at a forward EV-to-EBITDA multiple of 13.5x.

The mean target price for Kinder Morgan is $21.3, which implies an upside potential of ~12% from Kinder Morgan’s current price.

Kinder Morgan (KMI) and Williams Companies (WMB) have each risen ~24% in 2019. In comparison, ONEOK (OKE) has risen ~27%.

TransCanada (TRP) reported its fourth-quarter results on February 14. The company reported 32% growth in its comparable earnings.

Williams Companies reported an adjusted EBITDA of $1.20 billion, which missed the consensus estimates for the quarter ending December 31.

Midstream C corporations have posted impressive gains in 2019. The top stocks in the sector have outperformed the broader market.

Williams Companies (WMB) stock is trading at a forward EV-to-EBITDA multiple of 11x based on its estimated earnings for the next 12 months.

Williams Companies (WMB) paid a dividend of $0.34 per share in the fourth quarter, which implies an annualized dividend of $1.36 per share.

Williams Companies (WMB) is scheduled to release its fourth quarter and fiscal 2018 earnings on February 13.

Cheniere Energy (LNG) stock rallied approximately 11% in the last 12 months. It’s trading at a forward EV-to-EBITDA multiple of 13.7x, based on its projected earnings for the next 12 months.

MLPs fell marginally in the week ending January 25. The Alerian MLP Index fell 0.6% last week.

On January 16, Barclays raised its rating for Williams Companies (WMB) from “equal weight” to “overweight.”

Midstream stocks and MLPs continued to gain in the third week of 2019. The Alerian MLP Index rose 1.9% in the week ending January 18.

With simplified structures and greater financial discipline, MLPs look better-equipped to perform in the volatile commodity price environment.

Top MLP and midstream stocks have performed strongly so far in 2019. Stocks surged across the board.

Analysts’ average target price of $21.4 implies an upside potential of 24% from Kinder Morgan’s (KMI) current price.

Energy Transfer (ET) stock presents the highest potential upside among MLPs based on analysts’ target price for the next 12 months.

Williams Companies (WMB) stock has fallen more than 15% in the last two months and is currently trading at a 52-week low.

Kinder Morgan’s lower forward EV-to-EBITDA multiple indicates that the stock might be undervalued. Kinder Morgan’s EV-to-EBITDA multiple is 9.6x.

On November 19, U.S. Capital Advisors raised its rating for Targa Resources (TRGP) to “overweight” from “hold.”

Crude oil prices fell more than 10% in the week ending November 23. The top midstream companies also fell last week.

Williams Companies (WMB) gained 5.2% last week. Strong third-quarter performance drove the stock up.

Crude oil prices fell 6.6% last week. Despite the fall, most of the top midstream stocks managed to be in the green for the week.

ONEOK reported its third-quarter results on October 30 after the markets closed. The company’s EPS of $0.75 beat the consensus estimates.

Energy sector stocks tumbled in the week ended October 26. The midstream sector underperformed the broader markets.

Williams Companies stock is currently trading at $25.26, almost 11% and 9% below its 50-day and 200-day moving average levels, respectively.

Credit Suisse gave a “neutral” rating to Magellan Midstream Partners (MMP), ONEOK (OKE), and Sunoco (SUN).

On October 9, Antero Midstream GP agreed to buy MLP subsidiary Antero Midstream Partners, including shares held by Antero Resources (AR).

There were quite a few MLP merger announcements in the third quarter.

Williams Companies (WMB) stock has a median analyst target price of $34.17 compared to its current market price of $27.62.

The Kayne Anderson MLP/Midstream Investment Company (KYN) has generated YTD returns of -3.5%.

Top midstream stocks including Kinder Morgan (KMI), Williams Companies (WMB), and ONEOK (OKE) fell last week.

In the United States, the monthly natural gas production rose from 1.78 trillion cubic feet in January 2009 to 2.43 trillion cubic feet in June 2018.

According to analysts, Energy Transfer Equity (ETE) stock has a median target price of $21.53—compared to its current market price of $17.40.

Energy Transfer Equity paid a distribution of $0.31 per unit for the third quarter, which represents an annualized distribution of $1.22 per unit for 2018.

Williams Companies (WMB) has very small exposure to the Permian Basin. The company displayed flattish EBITDA growth in the first half of 2018.

Energy Transfer Equity stock has fallen ~2%, while Williams Companies stock has fallen ~10% in 2018.

Top midstream stocks Enterprise Products Partners (EPD) and Kinder Morgan (KMI) rose 0.9% and 0.7%, respectively, last week.

Of the three midstream companies we’re discussing in this series, Kinder Morgan (KMI) has the most “buy” recommendations from analysts.

ONEOK (OKE) stock has risen ~21% so far in 2018, outperforming its peers in the midstream sector.

Kinder Morgan (KMI), Williams Companies (WMB), and ONEOK (OKE) are currently trading at yields of ~4.5%, 4.6%, and 5.0%, respectively.

Over the last eight quarters, ONEOK’s (OKE) YoY (year-over-year) revenue growth averaged 29%.

US natural gas demand is expected to grow 40% from 80 Bcfpd (billion cubic feet per day) to 112 Bcfpd.

Kinder Morgan transports natural gas, refined petroleum, crude oil, condensate, CO2, and other products through its network of pipelines.

Kinder Morgan’s adjusted EBITDA grew 7% YoY in the second quarter. The EBITDA grew at an average rate of 4% over the last six quarters.

The short interest in Enterprise Products Partners (EPD) fell 9.4% from 8.5 million shares on July 13 to 7.7 million shares on July 31.

Kinder Morgan’s multiple is 27% lower than its five-year average. Kinder Morgan’s lower multiple could be due to analysts’ lower growth expectations.

Enterprise Products Partners and MPLX’s distributions have been on an upward trend. However, MPLX’s distributions grew faster.

So far, Enterprise Products Partners (EPD) has risen ~9% in 2018. The company has outperformed its peers in the midstream sector.

Energy Transfer Partners (ETP) has agreed to merge with the wholly owned subsidiary of Energy Transfer Equity in an all-stock deal.

Williams Companies (WMB) and Williams Partners (WPZ) reported their second-quarter earnings on August 1 after the market closed.

Yesterday, the EIA (U.S. Energy Information Administration) released its oil inventory report.

Of the top midstream companies we’ve discussed in this series, only ONEOK (OKE) and Cheniere Energy (LNG) have met analysts’ mean price targets from a year ago.

Of the 18 analysts covering Williams Companies (WMB), seven recommend “strong buy,” seven recommend “buy,” and four recommend “hold.”

August WTI oil futures contracts fell 0.7% in early morning trading on July 18. Brent and WTI crude oil futures rose ~0.5% and ~0.03% on July 17.

The one-year correlation coefficient between Energy Transfer Equity and crude oil was 0.49 as of July 11.

In Q1 2018, hedge funds increased their aggregate holdings in Cimarex Energy, Williams Companies, and Concho Resources by 12.66%, 22.73%, and 71.02%, respectively.