TARGA RESOURCES CORP (TRGP) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:TRGP - US87612G1013 - Common Stock
170.54 USD
+0.34 (+0.2%)
170.54 USD
0 (0%)
We assign a fundamental rating of 5 out of 10 to TRGP. TRGP was compared to 210 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 has a decent growth rate and is not valued too expensively.
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.
In multiple years TRGP reported negative net income over the last 5 years.
TRGP had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With a decent Return On Assets value of 6.68%, TRGP is doing good in the industry, outperforming 75.60% of the companies in the same industry.
The Return On Equity of TRGP (59.68%) is better than 95.69% of its industry peers.
The Return On Invested Capital of TRGP (11.84%) is better than 87.56% of its industry peers.
TRGP had an Average Return On Invested Capital over the past 3 years of 10.47%. This is significantly below the industry average of 21.28%.
The 3 year average ROIC (10.47%) for TRGP is below the current ROIC(11.84%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.68% | ||
| ROE | 59.68% | ||
| ROIC | 11.84% |
ROA(3y)4.73%
ROA(5y)0.69%
ROE(3y)37.62%
ROE(5y)11.05%
ROIC(3y)10.47%
ROIC(5y)9.38%
1.3 Margins
TRGP has a Profit Margin of 9.30%. This is comparable to the rest of the industry: TRGP outperforms 55.50% of its industry peers.
The Operating Margin of TRGP (17.92%) is comparable to the rest of the industry.
TRGP's Operating Margin has improved in the last couple of years.
The Gross Margin of TRGP (36.00%) is comparable to the rest of the industry.
In the last couple of years the Gross Margin of TRGP has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 17.92% | ||
| PM (TTM) | 9.3% | ||
| GM | 36% |
OM growth 3Y28.03%
OM growth 5Y22.99%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y22.2%
GM growth 5Y3.32%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so TRGP is still creating some value.
The number of shares outstanding for TRGP has been reduced compared to 1 year ago.
TRGP has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, TRGP has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 2.25 indicates that TRGP is not a great score, but indicates only limited risk for bankruptcy at the moment.
TRGP's Altman-Z score of 2.25 is fine compared to the rest of the industry. TRGP outperforms 70.81% of its industry peers.
The Debt to FCF ratio of TRGP is 27.12, which is on the high side as it means it would take TRGP, 27.12 years of fcf income to pay off all of its debts.
TRGP has a Debt to FCF ratio (27.12) which is in line with its industry peers.
A Debt/Equity ratio of 6.19 is on the high side and indicates that TRGP has dependencies on debt financing.
TRGP has a worse Debt to Equity ratio (6.19) than 89.95% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 6.19 | ||
| Debt/FCF | 27.12 | ||
| Altman-Z | 2.25 |
ROIC/WACC1.44
WACC8.22%
2.3 Liquidity
A Current Ratio of 0.77 indicates that TRGP may have some problems paying its short term obligations.
The Current ratio of TRGP (0.77) is worse than 69.86% of its industry peers.
TRGP has a Quick Ratio of 0.77. This is a bad value and indicates that TRGP is not financially healthy enough and could expect problems in meeting its short term obligations.
TRGP's Quick ratio of 0.61 is on the low side compared to the rest of the industry. TRGP is outperformed by 71.77% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.77 | ||
| Quick Ratio | 0.61 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 33.99% over the past year.
Measured over the past years, TRGP shows a very strong growth in Earnings Per Share. The EPS has been growing by 45.97% on average per year.
The Revenue has been growing slightly by 7.17% in the past year.
Measured over the past years, TRGP shows a quite strong growth in Revenue. The Revenue has been growing by 13.57% on average per year.
EPS 1Y (TTM)33.99%
EPS 3Y45.97%
EPS 5YN/A
EPS Q2Q%26.07%
Revenue 1Y (TTM)7.17%
Revenue growth 3Y-1.13%
Revenue growth 5Y13.57%
Sales Q2Q%7.77%
3.2 Future
The Earnings Per Share is expected to grow by 16.08% on average over the next years. This is quite good.
Based on estimates for the next years, TRGP will show a small growth in Revenue. The Revenue will grow by 5.98% on average per year.
EPS Next Y46.56%
EPS Next 2Y30.24%
EPS Next 3Y25.42%
EPS Next 5Y16.08%
Revenue Next Year10.84%
Revenue Next 2Y15.41%
Revenue Next 3Y11.28%
Revenue Next 5Y5.98%
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of 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
With a Price/Earnings ratio of 22.92, TRGP is valued on the expensive side.
TRGP's Price/Earnings is on the same level as the industry average.
TRGP's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 25.47.
With a Price/Forward Earnings ratio of 17.47, TRGP is valued on the expensive side.
TRGP's Price/Forward Earnings ratio is in line with the industry average.
TRGP is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 34.42, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.92 | ||
| Fwd PE | 17.47 |
4.2 Price Multiples
TRGP's Enterprise Value to EBITDA ratio is a bit more expensive when compared to the industry. TRGP is more expensive than 61.72% of the companies in the same industry.
The rest of the industry has a similar Price/Free Cash Flow ratio as TRGP.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 57.09 | ||
| EV/EBITDA | 11.7 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The decent profitability rating of TRGP may justify a higher PE ratio.
A more expensive valuation may be justified as TRGP's earnings are expected to grow with 25.42% in the coming years.
PEG (NY)0.49
PEG (5Y)N/A
EPS Next 2Y30.24%
EPS Next 3Y25.42%
5. Dividend
5.1 Amount
TRGP has a Yearly Dividend Yield of 2.35%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 5.90, TRGP has a dividend in line with its industry peers.
TRGP's Dividend Yield is comparable with the S&P500 average which is at 2.41.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.35% |
5.2 History
The dividend of TRGP decreases each year by -7.60%.
TRGP has been paying a dividend for at least 10 years, so it has a reliable track record.
TRGP has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)-7.6%
Div Incr Years3
Div Non Decr Years3
5.3 Sustainability
47.51% of the earnings are spent on dividend by TRGP. This is a bit on the high side, but may be sustainable.
DP47.51%
EPS Next 2Y30.24%
EPS Next 3Y25.42%
170.54
+0.34 (+0.2%)
Chartmill FA Rating
GICS SectorEnergy
GICS IndustryGroupEnergy
GICS IndustryOil, Gas & Consumable Fuels
Earnings (Last)
Earnings (Next)
Inst Owners93.16%
Inst Owner Change1.59%
Ins Owners1.39%
Ins Owner Change-1.39%
Market Cap36.70B
Revenue(TTM)17.38B
Net Income(TTM)1.62B
Analysts84.83
Price Target208.66 (22.35%)
Short Float %2.13%
Short Ratio2.87
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.35% |
Yearly Dividend2.8
Dividend Growth(5Y)-7.6%
DP47.51%
Div Incr Years3
Div Non Decr Years3
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)26.87%
Min EPS beat(2)3.1%
Max EPS beat(2)50.64%
EPS beat(4)2
Avg EPS beat(4)-6.61%
Min EPS beat(4)-54.87%
Max EPS beat(4)50.64%
EPS beat(8)4
Avg EPS beat(8)-4.7%
EPS beat(12)5
Avg EPS beat(12)-11.96%
EPS beat(16)6
Avg EPS beat(16)-16.4%
Revenue beat(2)0
Avg Revenue beat(2)-12.24%
Min Revenue beat(2)-13.68%
Max Revenue beat(2)-10.8%
Revenue beat(4)0
Avg Revenue beat(4)-9.17%
Min Revenue beat(4)-13.68%
Max Revenue beat(4)-3.5%
Revenue beat(8)2
Avg Revenue beat(8)-6.69%
Revenue beat(12)2
Avg Revenue beat(12)-11.29%
Revenue beat(16)4
Avg Revenue beat(16)-8.59%
PT rev (1m)0.6%
PT rev (3m)-0.42%
EPS NQ rev (1m)0.72%
EPS NQ rev (3m)2.75%
EPS NY rev (1m)0.65%
EPS NY rev (3m)4.13%
Revenue NQ rev (1m)3.55%
Revenue NQ rev (3m)-0.53%
Revenue NY rev (1m)-1.36%
Revenue NY rev (3m)-6.3%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.92 | ||
| Fwd PE | 17.47 | ||
| P/S | 2.11 | ||
| P/FCF | 57.09 | ||
| P/OCF | 9.81 | ||
| P/B | 13.56 | ||
| P/tB | 37.68 | ||
| EV/EBITDA | 11.7 |
EPS(TTM)7.44
EY4.36%
EPS(NY)9.76
Fwd EY5.72%
FCF(TTM)2.99
FCFY1.75%
OCF(TTM)17.38
OCFY10.19%
SpS80.76
BVpS12.58
TBVpS4.53
PEG (NY)0.49
PEG (5Y)N/A
Graham Number45.89
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.68% | ||
| ROE | 59.68% | ||
| ROCE | 14.67% | ||
| ROIC | 11.84% | ||
| ROICexc | 11.91% | ||
| ROICexgc | 12.98% | ||
| OM | 17.92% | ||
| PM (TTM) | 9.3% | ||
| GM | 36% | ||
| FCFM | 3.7% |
ROA(3y)4.73%
ROA(5y)0.69%
ROE(3y)37.62%
ROE(5y)11.05%
ROIC(3y)10.47%
ROIC(5y)9.38%
ROICexc(3y)10.57%
ROICexc(5y)9.49%
ROICexgc(3y)12.22%
ROICexgc(5y)10.81%
ROCE(3y)12.98%
ROCE(5y)11.62%
ROICexgc growth 3Y10.65%
ROICexgc growth 5Y35.31%
ROICexc growth 3Y10.05%
ROICexc growth 5Y35.4%
OM growth 3Y28.03%
OM growth 5Y22.99%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y22.2%
GM growth 5Y3.32%
F-Score7
Asset Turnover0.72
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 6.19 | ||
| Debt/FCF | 27.12 | ||
| Debt/EBITDA | 3.63 | ||
| Cap/Depr | 206.01% | ||
| Cap/Sales | 17.82% | ||
| Interest Coverage | 4.11 | ||
| Cash Conversion | 80.99% | ||
| Profit Quality | 39.79% | ||
| Current Ratio | 0.77 | ||
| Quick Ratio | 0.61 | ||
| Altman-Z | 2.25 |
F-Score7
WACC8.22%
ROIC/WACC1.44
Cap/Depr(3y)176.1%
Cap/Depr(5y)139.26%
Cap/Sales(3y)13.44%
Cap/Sales(5y)10.96%
Profit Quality(3y)82.47%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)33.99%
EPS 3Y45.97%
EPS 5YN/A
EPS Q2Q%26.07%
EPS Next Y46.56%
EPS Next 2Y30.24%
EPS Next 3Y25.42%
EPS Next 5Y16.08%
Revenue 1Y (TTM)7.17%
Revenue growth 3Y-1.13%
Revenue growth 5Y13.57%
Sales Q2Q%7.77%
Revenue Next Year10.84%
Revenue Next 2Y15.41%
Revenue Next 3Y11.28%
Revenue Next 5Y5.98%
EBIT growth 1Y18.41%
EBIT growth 3Y26.58%
EBIT growth 5Y39.68%
EBIT Next Year73.77%
EBIT Next 3Y27.6%
EBIT Next 5Y18.44%
FCF growth 1Y6.14%
FCF growth 3Y-27.54%
FCF growth 5YN/A
OCF growth 1Y33.98%
OCF growth 3Y16.59%
OCF growth 5Y21.3%
TARGA RESOURCES CORP / TRGP FAQ
Can you provide the ChartMill fundamental rating for TARGA RESOURCES CORP?
ChartMill assigns a fundamental rating of 5 / 10 to TRGP.
What is the valuation status of TARGA RESOURCES CORP (TRGP) stock?
ChartMill assigns a valuation rating of 4 / 10 to TARGA RESOURCES CORP (TRGP). This can be considered as Fairly Valued.
Can you provide the profitability details for TARGA RESOURCES CORP?
TARGA RESOURCES CORP (TRGP) has a profitability rating of 6 / 10.
What is the earnings growth outlook for TARGA RESOURCES CORP?
The Earnings per Share (EPS) of TARGA RESOURCES CORP (TRGP) is expected to grow by 46.56% in the next year.
Is the dividend of TARGA RESOURCES CORP sustainable?
The dividend rating of TARGA RESOURCES CORP (TRGP) is 4 / 10 and the dividend payout ratio is 47.51%.