NEW YORK ( TheStreet) -- The Williams Cos Inc (NYSE: WMB) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth, expanding profit margins, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company has had generally poor debt management on most measures that we evaluated.

Highlights from the ratings report include:
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 121.5% when compared to the same quarter one year prior, rising from -$1,263.00 million to $272.00 million.
  • WMB's revenue growth trails the industry average of 35.6%. Since the same quarter one year prior, revenues rose by 17.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 42.40% is the gross profit margin for WILLIAMS COS INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 10.10% is above that of the industry average.
  • Net operating cash flow has slightly increased to $668.00 million or 3.72% when compared to the same quarter last year. Despite an increase in cash flow, WILLIAMS COS INC's cash flow growth rate is still lower than the industry average growth rate of 32.50%.
  • Powered by its strong earnings growth of 121.86% and other important driving factors, this stock has surged by 36.18% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.

The Williams Companies, Inc., through its subsidiaries, engages in finding, producing, gathering, processing, and transporting natural gas primarily in the United States. The company has a P/E ratio of 19.2, below the average energy industry P/E ratio of 19.3 and above the S&P 500 P/E ratio of 17.7. The Williams Cos has a market cap of $19.03 billion and is part of the basic materials sector and energy industry. Shares are up 30.9% year to date as of the close of trading on Monday.

You can view the full The Williams Cos Ratings Report or get investment ideas from our investment research center.
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