MMarketMath

WMB

Fast growerQuality: Medium (63/100)3 red flags

Williams Companies · Energy · Oil & Gas Storage & Transportation

$70.97

52w 56.09 – 80.08

20y monthly, adjusted

Mkt cap

$86.8B

P/E

33.2

P/FCF

86.4

FCF yield

1.2%

ROE

20.4%

Shldr yield

2.8%

div 2.8% + bb 0.0%

What today's price assumes

At $86.8B, the market is pricing in 27.8% annual free-cash-flow growth for the next decade (10% discount rate, 2.5% terminal growth). Over the last five years, FCF actually grew -14.9% per year — the price asks for acceleration beyond the historical record.

Simple DCF per-share range: $3 · $3 · $4 (4% / base / optimistic growth). An estimate, not a target.

Adjust the assumptions yourself →

Historical multiple lens

At its own median P/OCF of 5.3× across 19 years, WMB would trade near $26/share (25th–75th percentile: $15–$32); it trades at 14.7× today.

Assumes the historical multiple regime persists — re-ratings can be permanent.

Growth record

Compound annual growth rates from as-filed 10-K data, split-adjusted

Rev 3y

−5.7%

Rev 5y

+14.3%

Rev 10y

+7.3%

EPS 5y

+66.0%

EPS 10y

—

FCF 5y

−14.9%

FCF 10y

—

Fundamentals

Fiscal 2007–2025, from SEC filings

Revenue

2007: $10.2B
2008: $11.9B
2009: $5.3B
2010: $6.6B
2011: $7.9B
2012: $7.5B
2013: $6.9B
2014: $7.6B
2015: $7.4B
2016: $7.5B
2017: $8.0B
2018: $8.6B
2019: $8.1B
2020: $7.7B
2021: $12.8B
2022: $17.8B
2023: $12.0B
2024: $12.6B
2025: $14.9B
$0$5.0B$10.0B$15.0B
07
11
15
19
23

Net income

2007: $990.0M
2008: $1.4B
2009: $285.0M
2010: −$1.1B
2011: $376.0M
2012: $859.0M
2013: $430.0M
2014: $2.1B
2015: −$571.0M
2016: −$424.0M
2017: $2.2B
2018: −$155.0M
2019: $850.0M
2020: $211.0M
2021: $1.5B
2022: $2.0B
2023: $3.2B
2024: $2.2B
2025: $2.6B
$0$2.0B
07
11
15
19
23

Free cash flow

2007: $5.1B
2008: −$39.0M
2009: $185.0M
2010: −$137.0M
2011: $643.0M
2012: −$694.0M
2013: −$1.4B
2014: −$1.9B
2015: −$459.0M
2016: $2.1B
2017: $690.0M
2018: $37.0M
2019: $1.6B
2020: $2.3B
2021: $2.7B
2022: $2.6B
2023: $3.4B
2024: $2.4B
2025: $1.0B
$0$2.0B$4.0B
07
11
15
19
23

Diluted shares (lower is better)

2007: 609.9M
2008: 592.7M
2009: 586.0M
2010: 590.7M
2011: 598.2M
2012: 625.5M
2013: 687.2M
2014: 723.6M
2015: 749.3M
2016: 750.7M
2017: 828.5M
2018: 973.6M
2019: 1.2B
2020: 1.2B
2021: 1.2B
2022: 1.2B
2023: 1.2B
2024: 1.2B
2025: 1.2B
0500.0M1.0B
07
11
15
19
23

Margins

-25%0%25%50%07101316192225
Net marginFCF marginGross margin

Capital returned (dividends + buybacks)

2007: $759.0M
2008: $724.0M
2009: $256.0M
2010: $284.0M
2011: $457.0M
2012: $742.0M
2013: $982.0M
2014: $1.4B
2015: $1.8B
2016: $1.3B
2017: $992.0M
2018: $1.4B
2019: $1.8B
2020: $1.9B
2021: $2.0B
2022: $2.1B
2023: $2.3B
2024: $2.3B
2025: $2.4B
$0$1.0B$2.0B
07
11
15
19
23

Cash vs long-term debt

$0$10.0B$20.0B07101316192225
CashLT debt

Quarterly

Discrete quarters from 10-Q filings; Q4 derived as fiscal year minus Q1–Q3. OCF is unwound from the year-to-date figures 10-Qs report. Compare to the same quarter a year ago — most businesses are seasonal.

Revenue by quarter

Q2'23: $2.8B
Q3'23: $3.1B
Q4'23: $3.0B
Q1'24: $3.3B
Q2'24: $2.8B
Q3'24: $3.0B
Q4'24: $3.4B
Q1'25: $4.2B
Q2'25: $3.4B
Q3'25: $3.5B
Q4'25: $3.8B
Q1'26: $4.7B
Q2'26: $3.4B
$0$2.0B$4.0B
23
24
24
25
26

Net income by quarter

Q2'23: $460.0M
Q3'23: $654.0M
Q4'23: $1.1B
Q1'24: $632.0M
Q2'24: $401.0M
Q3'24: $706.0M
Q4'24: $486.0M
Q1'25: $691.0M
Q2'25: $546.0M
Q3'25: $647.0M
Q4'25: $734.0M
Q1'26: $865.0M
Q2'26: $827.0M
$0$500.0M$1.0B
23
24
24
25
26
QuarterRevenueYoYNet incomeYoYEPSOCF
Q2'26$3.4B+0.0%$827.0M+51.5%0.68$1.4B
Q1'26$4.7B+12.7%$865.0M+25.2%0.70$1.6B
Q4'25 *$3.8B+12.7%$734.0M+51.0%0.60$1.6B
Q3'25$3.5B+15.0%$647.0M−8.4%0.53$1.4B
Q2'25$3.4B+18.7%$546.0M+36.2%0.45$1.4B
Q1'25$4.2B+25.4%$691.0M+9.3%0.56$1.4B
Q4'24 *$3.4B+12.9%$486.0M−57.3%0.39$1.2B
Q3'24$3.0B−0.8%$706.0M+8.0%0.58$1.2B
Q2'24$2.8B+1.9%$401.0M−12.8%0.33$1.3B
Q1'24$3.3B+7.1%$632.0M−31.8%0.52$1.2B
Q4'23 *$3.0B−26.8%$1.1B+70.1%0.92$1.8B
Q3'23$3.1B−38.4%$654.0M+9.0%0.54$1.2B
Q2'23$2.8B−39.0%$460.0M+15.0%0.38$1.4B

Track record

Compound annual growth by period. For debt and share count, negative is the good direction.

Series3y5y10y15y
Revenue−5.7%+14.3%+7.3%+5.5%
Operating cash flow+6.5%+11.0%+8.1%+5.5%
Free cash flow−27.5%−14.9%+3.2%+11.2%
EPS (diluted)+8.6%+66.0%−2.8%+9.7%
Equity+3.7%+1.7%+7.6%+4.3%
LT debt+7.6%+5.0%+1.4%+8.0%
Diluted shares+0.1%+0.2%+5.0%+5.0%
Stock price+32.3%+29.3%+15.5%+13.8%

$100, 3 years ago

$231vs $176 in SPY

32.3% vs 20.7%/yr

$100, 5 years ago

$361vs $181 in SPY

29.3% vs 12.6%/yr

$100, 10 years ago

$422vs $412 in SPY

15.5% vs 15.2%/yr

$100, 15 years ago

$694vs $813 in SPY

13.8% vs 15.0%/yr

The $1 test — market value created per $1 of earnings retained (Buffett's hurdle: at least $1)

Last 5 years

$104.30

$61.3B created / $588.0M retained

Quality & capital discipline

Cash-based returns and how management deploys capital

Cash ROIC

14.7%

OCF ÷ (equity + debt)

OCF / EV yield

5.2%

MC vs 10× OCF

1.47

≤1 = priced under 10× OCF

Debt / FCF

27.2y

SBC / FCF

9.3%

Owner earnings

$912.0M

OCF − capex − SBC

OE yield

1.1%

Share count 5y

+4.0%

per year; negative = buybacks

Capital intensity

281.9%

net PP&E ÷ revenue

Sales efficiency

$1.80

new PP&E per $1 new revenue, 5y

Growth engine (5y): reinvested 27.2% of operating cash flow at an incremental return of 34.4% — an organically fundable growth rate of about 9.4% per year (growth ≈ reinvestment rate × incremental ROIC).

Checklist

13 of 26 checks pass · 50%. Checks with structurally missing inputs are excluded.

Growth & Consistency

4/7

  • Revenue growth

    14.3% · 5y CAGR ≥ 5%

    pass

  • EPS growth

    66.0% · 5y CAGR ≥ 5%

    pass

  • FCF growth

    -14.9% · 5y CAGR ≥ 5%

    fail

  • Revenue rises consistently

    6 of 9 · up in ≥ 7 of last 10 years

    fail

  • FCF consistently positive

    10 of 10 · positive in ≥ 8 of last 10 years

    pass

  • Profitable every year

    8 of 10 · net income > 0 in ≥ 8 of last 10

    pass

  • Cash flow keeps up with sales

    11.0% vs 14.3% · OCF CAGR ≥ 0.9× revenue CAGR

    fail

Profitability

6/6

  • Net margin

    17.6% · ≥ 8%

    pass

  • Operating margin

    28.2% · ≥ 10%

    pass

  • Gross margin stable or rising

    — · no drop > 2 pts over 3y

    na

  • Return on equity

    20.4% · ≥ 12%

    pass

  • Cash ROIC

    14.7% · ≥ 12%

    pass

  • FCF margin

    6.7% · ≥ 5%

    pass

  • Earnings back their cash

    OCF $5.9B vs NI $2.6B · OCF ≥ net income (latest FY)

    pass

Balance Sheet

1/5

  • Debt payable from cash flow

    27.2y · LT debt ≤ 3× FCF

    fail

  • Cash cushion

    0% · cash ≥ 50% of LT debt

    fail

  • Leverage

    2.13 · LT debt ≤ 1.5× equity

    fail

  • Equity positive and compounding

    $12.8B · equity > 0 and grew over ~5y

    pass

  • Interest burden

    34% · interest ≤ 15% of operating income

    fail

Capital Allocation

1/4

  • Share count flat or shrinking

    4.0% · ≤ +0.5%/yr over ~5y

    fail

  • Stock comp restrained

    9% · SBC ≤ 15% of FCF

    pass

  • Distributions funded by FCF

    243% · dividends + buybacks ≤ 100% of FCF

    fail

  • Repurchases are a habit

    2 of 10 · buybacks in ≥ 5 of last 10 years

    fail

Valuation Discipline

1/4

  • FCF yield

    1.2% · ≥ 3%

    fail

  • Earnings multiple

    33.2 · P/E ≤ 25

    fail

  • Price asks less than history delivered

    27.8% vs -14.9% · implied FCF growth ≤ historical FCF CAGR

    fail

  • Shareholder yield

    2.8% · dividends + buybacks ≥ 2% of market cap

    pass

Red flags

Mechanical checks — a flag is a question to investigate, not a verdict

Heavy debt load

Long-term debt exceeds 5 years of free cash flow.

Shareholder dilution

Diluted share count has grown by more than 2% per year over ~5 years.

Distributions exceed FCF

Dividends plus buybacks exceeded free cash flow in the latest fiscal year.

Financial data

As filed in 10-Ks; per-share figures split-adjusted. $ in millions.

FYRevenueGross profitOp incomeNet incomeEPSOCFCapExFCFDividendsBuybacksSBCCashLT debtEquityShares
202514,899—4,1962,6182.145,8984,8931,0052,4420936327,31612,8071,225
202412,632—3,3392,2251.824,9742,5732,4012,3160996024,73612,4361,223
202311,996—4,3113,1792.605,9382,5163,4222,179130772,15023,37612,4021,223
202217,773—3,0182,0491.674,8892,2532,6362,07197315221,92711,4851,223
202112,784—2,6311,5171.243,9451,2392,7061,9920811,68021,65011,4231,218
20207,653—2,2022110.173,4961,2392,2571,941—5214221,45111,7691,215
20198,140—1,9218500.703,6932,1091,5841,842—5728920,14813,3631,214
20188,604—768-155-0.163,2933,256371,386—5516822,36714,660974
20178,031—9272,1742.623,0892,399690992—7889920,4349,656829
20167,499—689-424-0.574,1552,0512,1041,261—7317022,6244,643751
20157,360—226-571-0.762,7083,167-4591,836—8210023,8126,148749
20147,637—1,5692,1142.922,1154,031-1,9161,412—5324020,7808,777724
20136,860—1,3754300.622,2173,572-1,355982—3768111,3534,864687
20127,486—1,6128591.371,8352,529-694742—3683910,7354,752625
20117,930—1,8673760.633,4392,796643457—528898,3691,296598
20106,638—1,407-1,097-1.862,6512,788-137284—487588,6006,803591
20095,278—1,1062850.492,5722,3871852560431,8678,2598,447586
200811,890—2,5331,4182.403,3553,394-39250474311,4397,6838,440593
200710,239—1,7879901.632,237-2,8685,105-233-526—1,699—7,805610

Some concepts are structurally absent for certain industries (banks report no gross profit or capex). Missing ≠ zero.

Compare with peers →·10-K filings on EDGAR ↗