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Williams Companies Upgraded to “Outperform” at Wells Fargo; Robust Dividend Growth Expected (WMB)

By Dividend.com,  May 23, 2012, 08:36:05 AM EDT

Integrated oil and natural gas producer Williams Companies, Inc. ( WMB ) on Wednesday caught a big upgrade from analysts at Wells Fargo.

The firm said it boosted its rating on WMB from "Market Perform" to "Outperform" with a price target range of $37-40. That target suggests up to a 28% upside to the stock's Tuesday closing price of $31.29.

A Wells Fargo analyst commented, "WMB is well positioned to continue delivering robust dividend growth (i.e. target of 20% annually in 2013 and 2014) supported by 8-10% annual increases in WPZ's distribution, a projected 31% CAGR in the IDRs, and an estimated 31% CAGR in MC&O results. Management remains positive long-term on natural gas fundamentals. The commodity's low cost and price advantage against most other energy sources is spurring investments in a multitude of industries including power generation, steel, agriculture (e.g. fertilizer), and petrochemical (e.g. energy consumption of new crackers and downstream units)."

Williams Companies shares posted modest gains in premarket trading Wednesday.

The Bottom Line
Shares of Williams Companies ( WMB ) have a 3.84% dividend yield, based on last night's closing stock price of $31.29. The stock has technical support in the $28-$30 price area. If the shares can firm up, we see overhead resistance around the $32-$34 price levels.

Williams Companies, Inc. ( WMB ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .




The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.


This article appears in: Investing, Stocks

Referenced Stocks: WMB



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