Williams Cos., the oil and natural gas pipeline operator that Energy Transfer Equity LP is proposing to buy, said Thursday that it’ll preserve its quarterly dividend, taking the opposite tack of some energy companies cutting amid one of the worst-ever downturns for the oil industry.
Williams’ board approved a regular dividend of 64 cents, $2.56 annualized, on common stock, the Tulsa, Oklahoma-based company said in a statement late Thursday. The company said that’s a 6-cent increase from the first three months of last year, while unchanged from the fourth quarter.
Williams, which has paid a common-stock, quarterly dividend since 1974, is maintaining payouts even as peers, including pipeline giant Kinder Morgan Inc., and energy explorers from Anadarko Petroleum Corp. to ConocoPhillips have slashed theirs. Sliding oil prices have weighed on energy stocks for the past year, dragging Williams’ shares down 63 percent. Its shrinking value has cast doubt on whether its takeover by Energy Transfer, announced in September, will actually close.
“Williams is a little bit of a special case because they are getting acquired now by Energy Transfer,” said Michael Kay, an oil and gas analyst for Bloomberg Intelligence in New York. “The willingness to cut the growth in the dividend is probably not there.”
Williams was up 1.3 percent at $18.32 in after-markets trading.
Williams is also less vulnerable to dividend cuts because “it’s in the pipeline business and, for the most part, those companies are going to fare better,” James Williams, president of energy consultancy WTRG Economics, said by phone late Thursday. “Oil and gas is still flowing through pipelines. While oil and gas production in the U.S. is going to decline, consumption probably won’t.”
Williams said its dividend is payable March 28 to those who hold stock at the close of business on March 14.