Williams Companies Inc's Dividend Analysis
Assessing the Sustainability of Williams Companies Inc's Dividend
Williams Companies Inc (NYSE:WMB) recently announced a dividend of $0.48 per share, payable on 2024-03-25, with the ex-dividend date set for 2024-03-07. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Williams Companies Inc's dividend performance and assess its sustainability.
What Does Williams Companies Inc Do?
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Williams Companies is a midstream energy company that owns and operates the large Transco and Northwest pipeline systems and associated natural gas gathering, processing, and storage assets. In August 2018, the firm acquired the remaining 26% ownership of its limited partner, Williams Partners.
A Glimpse at Williams Companies Inc's Dividend History
Williams Companies Inc has maintained a consistent dividend payment record since 1985. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Williams Companies Inc's Dividend Yield and Growth
As of today, Williams Companies Inc currently has a 12-month trailing dividend yield of 4.90% and a 12-month forward dividend yield of 5.19%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Williams Companies Inc's annual dividend growth rate was 3.80%. Extended to a five-year horizon, this rate increased to 5.10% per year. And over the past decade, Williams Companies Inc's annual dividends per share growth rate stands at -0.50%.
Based on Williams Companies Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Williams Companies Inc stock as of today is approximately 6.28%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-12-31, Williams Companies Inc's dividend payout ratio is 0.80. And this may suggest that the company's dividend may not be sustainable.