Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
) has been reiterated by TheStreet Ratings as a buy with a ratings score of B- . The company's strengths can be seen in multiple areas, such as its notable return on equity and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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Highlights from the ratings report include:
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, WILLIAMS COS INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- 41.20% is the gross profit margin for WILLIAMS COS INC which we consider to be strong. Regardless of WMB's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, WMB's net profit margin of 8.84% compares favorably to the industry average.
- WMB, with its decline in revenue, slightly underperformed the industry average of 6.9%. Since the same quarter one year prior, revenues fell by 11.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- WILLIAMS COS INC's earnings per share declined by 41.9% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, WILLIAMS COS INC turned its bottom line around by earning $1.35 versus -$1.88 in the prior year. For the next year, the market is expecting a contraction of 14.8% in earnings ($1.15 versus $1.35).
- The debt-to-equity ratio is very high at 3.08 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Even though the debt-to-equity ratio is weak, WMB's quick ratio is somewhat strong at 1.17, demonstrating the ability to handle short-term liquidity needs.
The Williams Companies, Inc. operates as an energy infrastructure company in the United States. Williams Companies has a market cap of $20.01 billion and is part of the basic materials sector and energy industry. The company has a P/E ratio of 30.1, above the S&P 500 P/E ratio of 17.7. Shares are down 3.4% year to date as of the close of trading on Tuesday.
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--Written by a member of TheStreet Ratings Staff.
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