Williams transports about 30% of the natural gas production in the United States.
Its business is booming as AI data centers, factories, and homes consume more natural gas.
The Williams Companies (NYSE: WMB) isn’t usually considered a high-growth stock. But over the past five years, the midstream company’s stock has more than tripled. If we include its reinvested dividends, it delivered a total return of more than 280%. Let’s see why Williams’ stock skyrocketed — and why buying it today could be the best financial decision you ever make.
Williams operates more than 33,000 miles of pipeline in the United States. Like other midstream companies, the company is well insulated from volatile commodity prices because it simply charges upstream and downstream companies “tolls” for using its infrastructure.
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But unlike many other midstream companies, which transport natural gas, crude oil, and other products through their pipelines, Williams primarily handles natural gas through its Transco pipeline system — which runs from Texas to the Eastern Seaboard.
That natural gas “superhighway” transports roughly 30% of the country’s natural gas production. The construction of new AI-oriented data centers, coal-to-gas conversion facilities, and reshored manufacturing facilities — as well as population growth in the Southeast states and rising liquefied natural gas (LNG) exports — have all been driving more gas through its pipelines.
Williams also builds “behind the meter” (BTM) sites at data centers to provide hyperscalers with a stable flow of natural gas while bypassing traditional utilities. That approach makes it more of a play on the booming AI, cloud, and data center markets than many of its midstream peers.
That’s why its year-end backlog rose from $11.8 billion in 2024 to $15.5 billion in 2025. It also recently announced three new projects — including its largest-ever 682 MW Neo power project — to address the soaring demand for natural gas-fired electricity.
From 2020 to 2025, Williams’ adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) grew at a 9% CAGR from $5.11 billion to $7.75 billion. From 2025 to 2028, analysts expect its adjusted EBITDA to grow at an 11% CAGR to $10.51 billion.
With an enterprise value of $130.5 billion, Williams still looks like a bargain at 16 times this year’s adjusted EBITDA. It also pays an attractive forward dividend yield of 2.6%.
If it matches analysts’ estimates through 2028, grows its adjusted EBITDA at a 10% CAGR through 2036, and trades at a more generous 20 times its current year’s adjusted EBITDA by the final year, its stock could more than triple over the next 10 years. So if you’re looking for a simple pipeline way to profit from the natural gas boom, Williams checks all the right boxes.
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Leo Sun has positions in Williams Companies. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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