No. 4 Williams Cos.: Cash-flow pipeline clear, CEO says [Tulsa World, Okla.]

Sept. 16-- Some investment professionals point to a growing stock dividend as part of the reason for including Williams Cos. Inc. among their top picks this year.

In July, the Tulsa-based natural gas infrastructure company, which trades under the ticker symbol WMB on the New York Stock Exchange, raised its quarterly dividend by 1.25 cents per share to 31.25 cents per share. The payout was made Sept. 10 to shareholders of record at the close of business Aug. 24.

Now that Williams has separated its exploration and production business, WPX Energy Inc., from the pipeline and midstream business, there is a much clearer path to stable cash flows, said Keith Goddard, CEO of Capital Advisors Inc. Williams spun off WPX at the end of last year.

Goddard said he thinks Williams could grow its dividend by 10 percent or more for several years.

Brett Kramer, managing partner with Pinnacle Investment Advisors, also likes the dividend yield and dividend growth prospects in the coming years. He noted that the company has $25 billion in capital expenditures to spend over the next five years, which would be an 80 percent increase approximately in its asset size.

"The build out of the shale play and liquid plays in the United States is creating great opportunities in the energy infrastructure business," Kramer said.

General volatility of the market and a potential drop in the commodity price would pose the biggest risks to the company going forward, investment professionals said. A rising interest rate environment also would pose a risk to the company's dividend yields.

Williams, like any company that gains part of its investor appeal from dividend yields, is at risk to a rising interest rate environment, Goddard said.

"Despite lowering near-term earning per share guidance, management has stated its intention to grow the dividend for WMB by 55 percent in 2012 and by 20 percent in 2013 ... WMB's growth prospects, attractive dividend and valuation position the firm to perform well over the coming year," said Michael Abboud, vice president and trust investment officer of the Trust Company of Oklahoma.

In July, Williams said it was exploring whether to build a propane dehydrogenation plant in western Canada that would allow it to increase production of polymer-grade propylene, a feedstock used in plastics manufacturing.

Earlier this year, Williams had sought to buy Southern Union Co. for more than $5 billion in cash, but ended up losing the bid to Energy Transfer Equity LP, which closed on the $5.7 billion cash-and-stock merger in March.

Address: One Williams Center, Suite 4700, Tulsa, OK 74172

Phone: 918-573-2000

Web: www.williams.com

Chairman: Frank T. MacInnis

President/CEO: Alan S. Armstrong

CFO: Donald R. Chappel

Symbol (Exchange): WMB (NYSE)

Operation: One of the largest providers of energy infrastructure in North America.

Laurie Winslow 918-581-8466

laurie.winslow@tulsaworld.com

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