Is Williams Companies Inc (WMB) Stock Trading Below Fair Value?

Williams Companies Inc (WMB) receives a weak valuation score of 12 from InvestorsObserver analysis. Our proprietary scoring system considers the overall health of the company by looking at the stock's price, earnings, and growth rate to determine if it represents a good value. WMB holds a better value than 12% of stocks at its current price. Investors who are focused on long-term growth through buy-and-hold investing will find the Valuation Rank especially relevant when allocating their assets.

WMB gets a 12 Valuation Rank today. Find out what this means to you and get the rest of the rankings on WMB!

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Metrics Analysis

WMB has a trailing twelve month Price to Earnings (PE) ratio of 15.73. The historical average of roughly 15 shows a average value for WMB stock as investors are paying fair share prices relative to the company's earnings. WMB's average trailing PE ratio shows that the firm has been trading around its fair market value recently. Its trailing 12-month earnings per share (EPS) of 2.22 justifies the stock's current price. However, trailing PE ratios do not factor in the company's projected growth rate, resulting in many newer firms having high PE ratios due to high growth potential enticing investors despite inadequate earnings. WMB currently has a 12-month-forward-PE-to-Growth (PEG) ratio of 4.99. The market is currently overvaluing WMB in relation to its projected growth due to the PEG ratio being above the fair market value of 1. WMB's PEG comes from its forward price to earnings ratio being divided by its growth rate. Because PEG ratios include more fundamentals of a company's overall health with additional focus on the future, they are one of the most used valuation metrics by analysts.

Summary

All together these valuation metrics paint a pretty poor picture for WMB at its current price due to a overvalued PEG ratio due to strong growth. The PE and PEG for WMB are worse than the average of the market resulting in a valuation score of 12. Click Here to get the full Report on Williams Companies Inc (WMB) stock.