A Williams Cos. natural gas drilling rig is pictured near Parachute, Colo. Tulsa-based Williams is planning major growth projects in the near future. Courtesy
Williams Cos. Inc.'s aggressive dividend growth policy is gaining traction with investors, one financial adviser said.
The Tulsa-based natural gas infrastructure firm is committed publicly to raising its dividend 20 percent annually through 2015. Keith Goddard, CEO of Capital Advisors Inc., pointed out that those yields are competitive alternatives.
"It gives you a lot of cover against rising interest rates," said Goddard, who ranked Williams ninth among his Investment Guide choices.
Williams owns distribution rights and control of gas and natural gas liquids pipeline and processing-focused Williams Partners, as well as a large stake in Access Midstream Partners LP. The parent Williams reported $142 million in second-quarter net income, higher than the same period a year ago despite weak natural gas liquids margins.
The company is protected in some regard because it does not own the price-volatile commodities that it stores and transports.
"WMB should benefit from nearly 75 percent of the business being fee-based," Jim Huntzinger, chief investment officer for BOK Financial Corp., said in written remarks for his No. 1 pick. "WMB is expecting to see considerable dividend growth in the coming years."
Williams and its master limited partnership also are planning major growth projects in the near future. Williams and Boardwalk Pipeline Partners have agreed on a joint venture hoping to develop the Bluegrass Pipeline to bring NGLs from Ohio, Pennsylvania and West Virginia shale production to the petrochemical and export facilities on the Gulf Coast.
Williams Partners also has expanded its interstate Transco natural gas pipeline. The companies, however, are dealing with the explosion and reconstruction of the Geismar, La., petrochemical plant.
"Looking long term, WMB is presently providing an excellent entry point in the stock," Huntzinger said. "Mired in concerns over weak NGL margins and the recent Geismar plant explosion ... there has been considerable uncertainly surrounding the company's near-term prospects."
Williams was founded 105 years ago.
Williams Cos. Inc.
Address: One Williams Center, Tulsa, OK, 74172
Phone: 918-573-2000
Web: www.williams.com
Chairman: Frank MacInnis
President and CEO: Alan Armstrong
Symbol (Exchange): WMB (NYSE)
Operation: Natural gas and natural gas liquids pipeline transportation and processing in U.S., Canada and Gulf Coast.
Rod Walton 918-581-8457
rod.walton@tulsaworld.com
Original Print Headline: Dividend policy attracts investors
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