In 2021, ESG and natural gas leader Williams ranked No. 1 among its oil and gas industry peers on the Dow Jones Sustainability Index. Now WMB stock aims to power a new breakout as the energy sector tries to buck pressure in the stock market indexes.
Also known as sustainable investing, ESG investing focuses on how well companies address environmental, social and governance issues.
Last year, Williams earned top billing in its industry peer group on the Dow Jones Sustainability Index. Indeed, it was the only U.S. energy company included in DJSI's world index.
Several other ESG ratings groups also acknowledged Williams' commitment to sustainability, climate change and other social and corporate responsibility issues. Among them, S&P Global Platts named Williams the winner of its 2021 Award of Excellence — Midstream. Noting its leadership in addressing climate change, S&P Global Platts recognized how Williams continues to incorporate solar power, renewable natural gas and green hydrogen into its existing energy infrastructure network.
Sustainalytics, CDP and MSCI also acknowledged Williams for its ESG and sustainability initiatives.
Adding to its accolades, WMB stock has also earned a spot on the IBD Breakout Stocks Index. Fellow energy stocks Royal Dutch Shell, Occidental Petroleum and Continental Resources join Williams and several other oil and gas plays on the index.
See All Energy Stocks On The IBD Breakout Stocks Index
ESG Leader And Top Dividend Stock Gets Energized Ahead Of Earnings
Headquartered in Tulsa, Okla., Williams has operations across the entire natural gas value chain. It gathers, processes, transports and stores natural gas and natural gas liquids. It owns and operates over 30,000 miles of pipelines, handing roughly 30% of the natural gas in the U.S.
Currently yielding 5.6% on an annualized basis, Williams is also among the best dividend stocks.
Williams is scheduled to report Q4 and full-year earnings on Feb. 22. Analysts expect the company to generate 6% EPS growth for the quarter and a 10% gain for 2021.
Its integrated oil & gas industry group ranks No. 6 among the 197 groups IBD tracks. WMB stock earns a 97 Composite Rating, making it one of the leaders in the group in IBD Stock Checkup.
Williams Primes Potential Buy Point And Breakout
With its relative strength line on the rise, WMB stock is closing in on a 29.99 buy point in a cup-shaped base.
Volume in the right side of the chart pattern has been strong, an encouraging sign of demand ahead of a breakout.
While Williams and other energy stocks have been showing relative strength, keep a close eye on the broad stock market indexes. The S&P 500 and Dow Jones Industrial Average are both below their 50-day lines. The Nasdaq has fallen below that benchmark, as well as the longer-term 200-day moving average.
So while oil and gas stocks continue to fare well, action in the S&P and the Nasdaq reveals the turbulence in tech and growth stocks. Combined with earnings season getting underway, the current environment calls for caution.
Taking into account that backdrop, see if ESG initiatives and energy trends can fuel a breakout and sustained run for Williams.
Early Wednesday, WMB stock has pulled back after rising to just below the buy point. Look for Williams to find support and come off the day's lows.
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Follow Matthew Galgani on Twitter at @IBD_MGalgani.
