Williams Companies Inc.
) hit a 52-week high of $38.61 on Dec 30. In fact, the Tulsa,
Oklahoma-based energy firm has seen its stock price climb some
10% during the past month.
This price appreciation can be attributed to its ability to
generate highly visible cash flow and dividend growth over the
next several years. What's more, Williams Companies' exposure to
a bullish natural gas liquids (NGL) processing market and a deep
inventory of growth projects is set to unlock significant
Why the Bullishness?
Williams Companies is a premier energy infrastructure provider in
North America. The company's core operations include finding,
producing, gathering, processing and transportation of natural
Williams Companies' midstream assets, which are less sensitive to
commodity prices, help the company to maintain a steady stream of
revenues and cash flow even if natural gas prices stay low.
Furthermore, Williams Companies is poised to benefit from the
rebound in industrial activity, which will include increased
natural gas demand in the form of natural gas liquids.
In Nov 2013, Williams Companies approved a raise in its quarterly
cash dividend to 38 cents per share ($1.52 per share annualized),
representing an increase of 4% over the previous payout. The
dividend hike not only highlights the company's commitment to
create value for shareholders but also underlines Williams
Companies' new policy - a continued 20% annual dividend growth
over the next few years.
Finally, Williams Companies, after the volatile and
WPX Energy Inc.
) spin-off in 2011, has transformed itself into a pure play
midstream conglomerate with operations spanning from the Canadian
oil sands to deepwater fields in the Gulf of Mexico.
Zacks Rank & Stock Picks
With Williams Companies shares trading at 52-week high, any
upside from here may be limited, as suggested by the company's
Zacks Rank #3 (Hold). We also remain concerned about volatile
natural gas prices, which are likely to dampen its near-term
Some better-ranked stocks in the energy sector include
Parker Drilling Co.
Harvest Natural Resources Inc.
). Both carry a Zacks Rank #1 (Strong Buy).
HARVEST NATURAL (HNR): Free Stock Analysis
PARKER DRILLING (PKD): Free Stock Analysis
WILLIAMS COS (WMB): Free Stock Analysis
WPX ENERGY INC (WPX): Free Stock Analysis
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