WMB

We rate WILLIAMS COMPANIES, INC. (WMB) as a Hold with a composite score of 53.9/100 at a current price of $72.68. The stock presents a mixed quantitative picture — neither compelling enough to warrant new accumulation nor weak enough to justify selling for existing holders. Our factors are split, and the overall profile suggests patience is warranted.

The rating is primarily driven by strength in stability (75th percentile) and momentum (66th percentile), which together account for the majority of the composite score. Offsetting weakness in value (35th percentile) and investment (38th percentile) tempers our overall conviction. We assign a No Moat rating (37/100), Medium uncertainty, and Standard capital allocation.

Key items to watch: balance sheet deleveraging progress; sustainability of the current growth rate. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

WILLIAMS COMPANIES, INC. holds a top-quartile position (#0 of 50) within the Transportation, Communications, Electric, Gas, And Sanitary Services sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 53.9/100 places it at rank #1411 in our full 7,333-stock universe. With a $77.4B market capitalization, WILLIAMS COMPANIES, INC. operates at meaningful scale within the Transportation, Communications, Electric, Gas, And Sanitary Services sector, providing competitive advantages in distribution, procurement, and customer reach.

The near-term outlook is constructive, with revenue growing at 25% and momentum in the 66th percentile confirming positive market sentiment and institutional accumulation. The combination of strong top-line growth and favorable price dynamics suggests the company is executing well on its growth strategy. Investment factor at the 38th percentile indicates reinvestment patterns that investors should monitor for sustainability.

The margin cascade tells an important story: gross margins of 83% (+27.9pp vs sector) narrow to operating margins of 35% (+17.3pp vs sector) and net margins of 24.0%, yielding a gross-to-net conversion rate of 29%. This conversion rate is typical for the sector, suggesting a standard cost structure without notable efficiency advantages or disadvantages.

At a current price of $72.68, WILLIAMS COMPANIES, INC. is trading at a premium to fundamental value. Our value factor score of 35/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. The premium valuation implies the market is pricing in significant future growth or quality improvements that are not yet fully reflected in current fundamentals.

The stock currently trades at a P/E of 32.6x (a 93% premium to the sector median of 16.9x), EV/EBITDA of 22.4x (at a premium), P/B of 6.0x, P/S of 7.8x. The above-sector P/E multiple suggests the market is pricing in superior growth or quality, which our analysis finds only partially justified by current fundamentals.

We assign a Medium uncertainty rating to WILLIAMS COMPANIES, INC.. The stock presents a balanced risk profile: significant leverage (275% debt-to-equity) and low beta of 0.52 — while defensive, this may indicate limited upside participation in bull markets. While not risk-free, the core business fundamentals are adequate to withstand moderate economic stress, and the range of potential outcomes around our fair value estimate is manageable.

Specific risk factors that inform our assessment include: significant leverage (275% debt-to-equity); low beta of 0.52 — while defensive, this may indicate limited upside participation in bull markets. Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 75th percentile and quality factor at the 46th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: healthy gross margins of 83% provide a buffer against cost pressures; above-average stability (75th percentile) suggests predictable business dynamics; large-cap scale ($77.4B) provides resilience. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile is favorable for long-term investors.

We rate WILLIAMS COMPANIES, INC.'s capital allocation as Standard. Management has shown adequate — though not exceptional — stewardship of shareholder capital. Returns on equity stand at 18.4%, and the balance sheet is managed within acceptable parameters (D/E: 275%). Exemplary allocators typically sustain ROE above 20% and D/E below 50%; WILLIAMS COMPANIES, INC. falls short on at least one dimension.

There is room for improvement in optimizing the capital structure or enhancing shareholder returns. The 3.12% dividend yield provides some income return, but the overall capital allocation framework would benefit from either higher reinvestment returns, improved balance sheet efficiency, or increased shareholder distributions. We will monitor for signs of strategic improvement that could warrant an upgrade.

In summary, WILLIAMS COMPANIES, INC. receives a Hold rating with a composite score of 53.9/100 (rank #1411 of 7,333). Our quantitative framework assigns a No Moat (37/100, trend: stable), Medium uncertainty, and Standard capital allocation. The average factor score across quality, value, momentum, stability, and investment is 52/100.

Our analysis supports a neutral stance on WILLIAMS COMPANIES, INC.. While the quantitative profile is not weak enough to warrant selling, it lacks the multi-factor strength required for a buy recommendation. Existing holders should maintain positions and monitor for catalysts — either fundamental improvement or valuation compression — that would shift the risk-reward balance.