The Williams Companies, Inc. (WMB) Stock Valuation — PE Analysis
Oil & Gas Midstream · NYSE
Current Price
$74.09
PE Ratio (TTM)
29.4x
Intrinsic Value
$110.98
+33.2% margin of safety
COMPETITIVE MOAT
↑Regulated Infrastructure Network
Williams operates a vast, interconnected network of natural gas pipelines. This extensive infrastructure is difficult and costly for competitors to replicate, creating a significant barrier to entry.
↑Long-Term Contracts
The company secures revenue through long-term contracts with producers and end-users. These agreements provide revenue visibility and reduce exposure to volatile commodity prices.
↑Scale and Geographic Reach
Williams' large-scale operations and broad geographic footprint across key U.S. energy basins offer significant operational efficiencies. This scale allows for cost advantages and broader market access.
INVESTMENT RISKS
↓Energy Transition and Demand Shifts
A long-term shift away from fossil fuels towards renewable energy sources could reduce demand for natural gas transportation. This transition poses a secular risk to the core business.
↓Interest Rate Sensitivity
As a capital-intensive business, Williams relies on debt financing. Rising interest rates increase borrowing costs, potentially impacting profitability and dividend sustainability.
↓Operational and Environmental Incidents
Pipeline operations carry inherent risks of leaks, spills, or other accidents. Such incidents can lead to significant environmental damage, regulatory fines, and reputational harm.
Base case
WMB base case PE valuation
A base case PE valuation for WMB estimates a fair value of about $110.98 per share, against a current price of $74.09. The model assumes 15.9% annual earnings growth, a 29.76x target PE multiple, and a 10% discount rate.
Intrinsic Value
$110.98
Margin of safety
+33.2%
Expected annual return
+8.4%
Base case assumptions: 15.9% annual earnings growth, 29.76x target PE, 10% discount rate, 5 year projection. Data as of 2026-10-27.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the WMB PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for The Williams Companies, Inc. respond.
Open PE Calculator for WMBCompany Overview
The Williams Companies, Inc., alongside its subsidiaries, operates as a prominent energy infrastructure entity, primarily conducting business throughout the United States. The company’s operations are organized into four key segments: Transmission & Gulf of Mexico, Northeast G&P, West, and Gas & NGL Marketing Services. The Transmission & Gulf of Mexico division manages crucial natural gas pipelines such as Transco and Northwest, in addition to natural gas gathering and processing, and crude oil production handling and transportation assets situated in the Gulf Coast. This segment also oversees various petrochemical and feedstock pipelines. Focusing on midstream activities, the Northeast G&P segment handles gathering, processing, and fractionation within the Marcellus Shale region, predominantly in Pennsylvania and New York, and the Utica Shale region of eastern Ohio. The West segment delivers gas gathering, processing, and treating services across the Rocky Mountain areas of Colorado and Wyoming, the Barnett Shale in north-central Texas, the Eagle Ford Shale in South Texas, the Haynesville Shale in northwest Louisiana, and the expansive Mid-Continent region (including the Anadarko, Arkoma, and Permian basins). This segment also operates natural gas liquid (NGL) fractionation and storage facilities located near Conway in central Kansas. The Gas & NGL Marketing Services segment provides comprehensive wholesale marketing, trading, storage, and transportation of natural gas to utilities, municipalities, power generators, and producers, while also offering risk and asset management and NGL marketing services. The company possesses and operates an extensive network, including 30,000 miles of pipelines, 29 processing facilities, 7 fractionation facilities, and an approximate NGL storage capacity of 23 million barrels. The Williams Companies, Inc. was established in 1908 and maintains its headquarters in Tulsa, Oklahoma.
Financial Metrics — WMB PE Stock Valuation Data
PE Ratio (TTM)
29.4x
PEG Ratio
1.13
Earnings Yield
3.36%
ROE (TTM)
23.9%
Revenue/Share (TTM)
$9.97
Dividend Yield
2.80%
Debt/Equity
2.33x
Frequently Asked Questions
What is the PE ratio of WMB?
The trailing twelve-month PE ratio of WMB reflects how much investors pay per dollar of The Williams Companies, Inc.'s earnings. This metric is most useful when compared to Oil & Gas Midstream peers and the company's own historical range.
Is WMB overvalued based on PE ratio?
WMB's PE of 29.4x combined with a PEG ratio of 1.13 provides a growth-adjusted perspective. A PEG near 1.0 means the P/E is roughly in line with the earnings growth rate. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Oil & Gas Midstream, a DCF analysis may be more appropriate.
How do I value WMB stock using PE ratio?
To value The Williams Companies, Inc. using PE: (1) Compare the current PE (29.4x) against the Oil & Gas Midstream median to assess relative pricing, (2) check the PEG ratio (1.13) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of WMB?
WMB's PEG ratio is 1.13, calculated by dividing the PE ratio (29.4x) by the expected earnings growth rate. A PEG near 1.0 means the P/E is roughly in line with the expected earnings growth rate. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for WMB stock valuation?
PE ratio gives a quick relative read — how WMB is priced versus Oil & Gas Midstream peers. DCF provides an absolute value based on projected free cash flows. For WMB, with a strong ROE of 23.9%, both methods are worth using — PE for a market-relative check, DCF to stress-test whether fundamentals justify the price. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See WMB DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Energy valuationsP/E and DCF value WMB with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2026-10-27. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.