Williams Companies Ups Div 20% as Promised - Analyst Blog

North American energy firm, Williams Companies Inc. WMB increased its regular dividend to 42.50 cents per share ($1.70 annualized), up 20.6% from 35.25 cents in the prior-year quarter. The new dividend also marks sequential growth of 5.6%.

Williams Companies announced that the increased dividend will be paid on Jun 30, 2014 to stockholders of record as of Jun 13.

This increase in payout is in accordance with the company's announcement last week of an expectation of annual dividend growth of 20% through 2016. If Williams Companies succeeds in achieving its projected target, the annual payout in 2016 would reach to $2.54 per share.

Williams Companies has a history of making regular dividend payments, which makes it a lucrative pick for investors seeking value. The company has paid dividends in every quarter for the last 40 years.

Williams Companies is a premier energy infrastructure provider in North America. The company's core operations include finding, producing, gathering, processing and transportation of natural gas. The company's midstream assets, which are less sensitive to commodity prices, help it to maintain a steady stream of revenues and cash flow. However, volatility in the natural gas pricing scenario could dampen results.

The stock price has been rising for quite some time now and has an impressive year-to-date return of nearly 22%. Shares hit a new 52-week high of $46.81 on May 22, before dipping to close at $46.67. However, any upside from here may be limited, as suggested by its Zacks Rank #3 (Hold), which implies that it is expected to perform in line with the broader U.S. market in the next one to three months.

Meanwhile, one can consider better-ranked players from the industry such as EQT Midstream Partners, L.P. EQM, Pembina Pipeline Corporation PBA and Holly Energy Partners L.P. HEP. All these stocks sport a Zacks Rank #1 (Strong Buy).