NEW YORK (TheStreet) -- Williams Companies (WMB) shares are up 5.93% to $53.07 in early market trading on Wednesday after the energy infrastructure company announced an agreement to purchase its subsidiary, Williams Partners (WPZ), in a stock deal valued at approximately $14 billion.
"We continue to see an expanding portfolio of projects to connect the best supplies of natural gas and natural gas products to the best markets. The lower cost of capital and improved tax benefits expected from this transaction increase our confidence in extending the duration of our expected 10 percent to 15 percent dividend growth rate through 2020," said CEO Alan Armstrong.
The deal is expected to close in the third quarter this year with the company forecasting annual dividend growth between 10% and 15% through 2020. The company also announced a 6.7% increase in its third quarter dividend payout to 64 cents per share.
TheStreet Ratings team rates WILLIAMS COS INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate WILLIAMS COS INC (WMB) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, expanding profit margins, notable return on equity and solid stock price performance. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."