Wall Street responded to the decision by The Williams Cos. Inc. (WMB) to chop its dividend by lifting the company’s unit price by 13.9% over a three-day period.

Williams became the third midstream major to cut its dividend in the last eight months on Aug. 1, reflecting both the company’s inner turmoil following its failed merger with Energy Transfer Equity LP (ETE) and the effects of enduring commodity price woes creeping into the sector from upstream.

The dividend reduction will allow Williams to save about $1.3 billion annually, which will be pumped into Williams Partners LP (WPZ)

“We really think this is a great answer for bringing us the right cost of capital to go invest against all these great growth projects that we have as the natural gas market and the demand side continues to expand out,” Alan Armstrong, president and CEO, told analysts during the company’s second-quarter earnings call on Aug. 2.

Just over a year ago, Regina Mayor, KPMG LLP’s energy and natural resources national sector leader, told reporters in Houston that “protecting the dividend does seem to be a fairly significant strategy” as energy companies looked ahead to 2016.

But last December, Kinder Morgan Inc. (KMI) stunned the sector by chopping its dividend by 75.5%, from 51 cents per unit to 12.5 cents. Williams’ cut this week was 68.8%, from 64 cents per unit to 20 cents. The other midstream company to reduce its dividend so far is Plains All American Pipeline LP (PAA), which announced its 21.4% move in July.

“We believe KMI provides a useful proxy for how investors may interpret WMB’s pro forma outlook,” Jefferies LLC said in a research note.

Excluding joint venture debt, Kinder Morgan is leveraged at about 5.6x and expects to reach about 5.4x by year-end, Jefferies said. The point at which dividends will be increased, Kinder has indicated, is about 5x.

By comparison, Williams has a consolidated leverage of about 5.7x. What Jefferies expects from Williams is about a 2x enterprise-wide distributed cash flow coverage, an implied 3.55% dividend yield, investments in infrastructure through year-end 2017, sales of assets and the possibility of higher dividends in 2018.

“If WMB were to be viewed as a viable alternative to KMI and capture a dividend yield consistent with its current ~2.55%, it would imply a WMB share price of ~$31,” Jefferies said.

The Williams share price at midday on Aug. 2 was $23.50, down 54.5% from a year ago and 8.6% for the year. However, it was more than double its low closing price for 2016, set in early February.

Williams said in its Form 10-Q that its sharp reductions in capital investment and expenses reflect its expectation of continued low commodity prices and high costs of capital for the rest of the year.

Joseph Markman can be reached at jmarkman@hartenergy.com. Twitter handle: @JHMarkman