Williams Companies, Inc. (NYSE:WMB)

CAPS Rating: 3 out of 5

A natural gas company that finds, produces, gathers, processes and transports natural gas; also manages a wholesale power business and operations are concentrated in Pacific Northwest, Rocky Mountains, Gulf Coast, Southern California and Eastern Seaboard.


Player Avatar DAG1996MF (< 20) Submitted: 9/27/2012 12:57:50 AM : Outperform Start Price: $26.72 WMB Score: -2.70

Williams Companies is one of the best-run oil & gas infrastructure companies out there and is very shareholder friendly. For example, WMB currently pays a healthy 3.6% yield and management stated during the 2012 Analyst Day that it expects to raise the dividend every quarter in 2012 and continue raising the dividends through at least 2014.

In addition to the value of the strong dividends, now that Williams has eliminated a lot of risk by spinning off its exploration business earlier this year (WPX), the WMB stock price has been rising faster and more consistently. Those not familiar with the company should note that the January 3, 2012 drop in the WMB share price was only from the WPX spinoff. The resulting "free" WPX shares (which I have since sold for a nice profit) more than made up for the minor and temporary reduction in the WMB share price.

It's also important to note that WMB also owns 75% of its WPZ master limited partnership (including the general partner interest). So, owning the WMB parent company gives investors significant exposure to the value of WPZ, but without the tax headaches of an MLP. And, considering WMB's stated dividend policy, I wouldn't be surprised to see it yielding in the 5-7% range like an MLP within the next few years too.

Member Avatar DAG1996MF (< 20) Submitted: 9/28/2012 12:47:53 PM
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Barron's -- 3 Ways to Play the Dividend-Rich MLP Boom


FYI, you can see the full article without buying Barron's by putting the article title into a Google search and clicking the link from there.

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