TARGA RESOURCES CORP (TRGP)
US87612G1013 - Common Stock
Taking everything into account, TRGP scores 3 out of 10 in our fundamental rating. TRGP was compared to 214 industry peers in the Oil, Gas & Consumable Fuels industry. TRGP has a medium profitability rating, but doesn't score so well on its financial health evaluation. TRGP is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
TRGP had positive earnings in the past year.
TRGP had a positive operating cash flow in the past year.
The reported net income has been mixed in the past 5 years: TRGP reported negative net income in multiple years.
TRGP had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 4.03%, TRGP is doing worse than 64.79% of the companies in the same industry.
TRGP's Return On Equity of 30.42% is fine compared to the rest of the industry. TRGP outperforms 76.06% of its industry peers.
TRGP's Return On Invested Capital of 12.71% is fine compared to the rest of the industry. TRGP outperforms 69.01% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for TRGP is significantly below the industry average of 45.95%.
The last Return On Invested Capital (12.71%) for TRGP is above the 3 year average (10.24%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.03% | ||
| ROE | 30.42% | ||
| ROIC | 12.71% |
ROA(3y)2.83%
ROA(5y)-0.78%
ROE(3y)21.1%
ROE(5y)-0.03%
ROIC(3y)10.24%
ROIC(5y)8.2%
1.3 Margins
Looking at the Profit Margin, with a value of 5.19%, TRGP is doing worse than 69.48% of the companies in the same industry.
The Operating Margin of TRGP (16.35%) is worse than 61.03% of its industry peers.
TRGP's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 33.52%, TRGP is in line with its industry, outperforming 40.85% of the companies in the same industry.
TRGP's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 16.35% | ||
| PM (TTM) | 5.19% | ||
| GM | 33.52% |
OM growth 3Y2.53%
OM growth 5Y30.79%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-4.26%
GM growth 5Y9.37%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), TRGP is creating some value.
TRGP has less shares outstanding than it did 1 year ago.
TRGP has less shares outstanding than it did 5 years ago.
TRGP has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 2.07 indicates that TRGP is not a great score, but indicates only limited risk for bankruptcy at the moment.
TRGP has a Altman-Z score (2.07) which is comparable to the rest of the industry.
The Debt to FCF ratio of TRGP is 15.68, which is on the high side as it means it would take TRGP, 15.68 years of fcf income to pay off all of its debts.
TRGP's Debt to FCF ratio of 15.68 is on the low side compared to the rest of the industry. TRGP is outperformed by 64.32% of its industry peers.
TRGP has a Debt/Equity ratio of 4.50. This is a high value indicating a heavy dependency on external financing.
TRGP has a worse Debt to Equity ratio (4.50) than 91.08% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.5 | ||
| Debt/FCF | 15.68 | ||
| Altman-Z | 2.07 |
ROIC/WACC1.65
WACC7.72%
2.3 Liquidity
TRGP has a Current Ratio of 0.79. This is a bad value and indicates that TRGP is not financially healthy enough and could expect problems in meeting its short term obligations.
The Current ratio of TRGP (0.79) is worse than 73.24% of its industry peers.
TRGP has a Quick Ratio of 0.79. This is a bad value and indicates that TRGP is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.66, TRGP is doing worse than 77.93% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.79 | ||
| Quick Ratio | 0.66 |
3. Growth
3.1 Past
TRGP shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -5.04%.
Measured over the past years, TRGP shows a very strong growth in Earnings Per Share. The EPS has been growing by 161.90% on average per year.
The Revenue for TRGP has decreased by -23.27% in the past year. This is quite bad
Measured over the past years, TRGP shows a quite strong growth in Revenue. The Revenue has been growing by 8.90% on average per year.
EPS 1Y (TTM)-5.04%
EPS 3Y4.31%
EPS 5Y161.9%
EPS growth Q2Q-9.13%
Revenue 1Y (TTM)-23.27%
Revenue growth 3Y24.81%
Revenue growth 5Y8.9%
Revenue growth Q2Q-6.92%
3.2 Future
TRGP is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 16.91% yearly.
Based on estimates for the next years, TRGP will show a small growth in Revenue. The Revenue will grow by 6.05% on average per year.
EPS Next Y48.11%
EPS Next 2Y42.24%
EPS Next 3Y27.89%
EPS Next 5Y16.91%
Revenue Next Year25.61%
Revenue Next 2Y18.38%
Revenue Next 3Y4.76%
Revenue Next 5Y6.05%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
TRGP is valuated quite expensively with a Price/Earnings ratio of 31.81.
Based on the Price/Earnings ratio, TRGP is valued a bit more expensive than the industry average as 77.46% of the companies are valued more cheaply.
TRGP is valuated rather expensively when we compare the Price/Earnings ratio to 25.20, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 21.49, the valuation of TRGP can be described as rather expensive.
Compared to the rest of the industry, the Price/Forward Earnings ratio of TRGP indicates a slightly more expensive valuation: TRGP is more expensive than 63.38% of the companies listed in the same industry.
TRGP is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 21.63, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.81 | ||
| Fwd PE | 21.49 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, TRGP is valued a bit more expensive than the industry average as 64.32% of the companies are valued more cheaply.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of TRGP indicates a slightly more expensive valuation: TRGP is more expensive than 63.85% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 31.7 | ||
| EV/EBITDA | 9.82 |
4.3 Compensation for Growth
TRGP's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
A more expensive valuation may be justified as TRGP's earnings are expected to grow with 27.89% in the coming years.
PEG (NY)0.66
PEG (5Y)0.2
EPS Next 2Y42.24%
EPS Next 3Y27.89%
5. Dividend
5.1 Amount
TRGP has a Yearly Dividend Yield of 2.68%.
TRGP's Dividend Yield is comparable with the industry average which is at 5.79.
Compared to an average S&P500 Dividend Yield of 2.44, TRGP has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.68% |
5.2 History
The dividend of TRGP decreases each year by -14.16%.
TRGP has been paying a dividend for at least 10 years, so it has a reliable track record.
The dividend of TRGP decreased in the last 3 years.
Dividend Growth(5Y)-14.16%
Div Incr Years2
Div Non Decr Years2
5.3 Sustainability
TRGP pays out 51.28% of its income as dividend. This is a bit on the high side, but may be sustainable.
DP51.28%
EPS Next 2Y42.24%
EPS Next 3Y27.89%
TARGA RESOURCES CORP
NYSE:TRGP (4/25/2024, 7:21:33 PM)
After market: 117.68 0 (0%)117.68
+0.78 (+0.67%)
Chartmill FA Rating
GICS SectorEnergy
GICS IndustryGroupEnergy
GICS IndustryOil, Gas & Consumable Fuels
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap26.19B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.68% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.81 | ||
| Fwd PE | 21.49 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)0.66
PEG (5Y)0.2
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.03% | ||
| ROE | 30.42% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 16.35% | ||
| PM (TTM) | 5.19% | ||
| GM | 33.52% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.78
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.5 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 0.79 | ||
| Quick Ratio | 0.66 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)-5.04%
EPS 3Y4.31%
EPS 5Y
EPS growth Q2Q
EPS Next Y48.11%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-23.27%
Revenue growth 3Y24.81%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y